Teams are where effective agile changes begin. After using agile approaches, the productivity of your staff will be influenced by how quickly and effectively their workplace runs.
Teams that work independently can only make so much of an impact. Departments must work together to deliver value if agility is to be achieved with the speed and effectiveness it promises.
Silos must function with an end-to-end value mentality in order to fully realize their collaborative potential. On top of this, agile processes and objectives can be developed and released.
Organizations must allow value-based thinking to lead them towards a new way of working if they are to be successful in this phase of the change.
Silos-based Thinking Hinders Organizational Performance
Organizations typically segment themselves into departments based on areas of specialization including sales, marketing, operations, and information technology.
These silos cooperate to provide value overall, although they are frequently controlled by department-specific goals.
Teams lose the chance to collaborate to optimize the entire value chain by creating their own unique sets of objectives and procedures.
Organizations may find it challenging to jointly pivot or quickly launch new items in this fragmented market. Collaboration from beginning to end is essential for success.
To overcome this compartmentalized thinking and realize the full potential of your firm, connect the dots between divisions and direct them toward overarching business objectives. Collaboration from beginning to end is essential for success.
Departmental Transformation Challenges
Change is only consistent in the fact that it is never simple. Three issues firms must deal with during this stage of their transition are detailed below, along with solutions that will make your teams successful.
Challenge #1: Using virtual organizations to combat the silo mentality
Dismantling silos can be a difficult task. Many businesses make the error of reorganizing all at once, which frequently leads to a protracted transition that takes too long to complete. An agile mindset is essential.
Modifications to the structure are simpler to implement once agile methodologies have been absorbed. To promote this mindset without the upheaval of reorganization, build up a virtual organization.
Traditional responsibilities are still there in a virtual organization, but value has been established as the focal point. Ask teams to collaborate beyond silo barriers in order to accomplish the organization’s final goals.
By blending well-known segregated KPIs with fresh measurements that track your progress toward end-to-end business objectives, you can reinforce this end-to-end approach.
Traditional KPIs: These measure things like sales and response rates to campaigns. There is no immediate need to eliminate these because they are crucial performance indicators that now assist your teams in defining success.
Add new measurements that gauge the entire business value as new KPIs. These metrics should monitor operations that contribute to value creation generally, such as profitable operations, sustainable growth, and customer satisfaction.
Once adopting a hybrid model is second nature, decide where to make structural changes by letting agile thinking lead the way.
To achieve this shift, top-level leadership must be committed to holding silo managers accountable.
Even though it’s not part of the standard procedure, asking for a direct report enables you to get beyond obstacles and assess their contribution to value generation.
The idea that every department contributes to company success will be reinforced by bringing silos together in pursuit of shared achievement.
Challenge #2: Neglecting to concentrate on end-to-end optimization
Working together across silos is crucial to bettering your organization’s ability to implement change, as well as to achieve goals more successfully.
The only real approach to increase agility in your business is to continuously enhance its capacity for managing change.
But progress within the team itself is only going to get you so far. The production process is typically slowed down by bottlenecks that are situated between teams and silos.
Most businesses overlook this crucial aspect of agility in the flurry of restructuring and production cycles.
We must build on our successes from the first challenge to combat this. Organizations need to focus on the ultimate objective while also keeping an eye on how quickly things are changing along the entire value chain. A third group of KPIs can be used to illustrate this:
New indicators that gauge the organization’s capacity for change make up the third set of KPIs. Time-to-market, frequency, cost, and failure rate of changes are some metrics that are frequently utilized.
Enhancing your end-to-end agility quickly can assist avoid silo sub-optimization. Silos can realize their potential for collaboration and value creation within the company by working together.
Challenge #3: Allowing data to drive an experimental mindset
Organizations must translate performance into measurements that can be followed over time in order to make sure teams are working towards common objectives.
When goals are specific and measurable, departments can more readily share them.
It’s hardly surprising that many firms struggle to successfully manage and use this information in our data-rich world.
While leveraging data to guide your operations is a fundamental component of an agile workflow, many businesses make the mistake of spending a lot of time and money creating the ideal dashboard before really using their data.
You’re flying blind while this technological refurbishment is taking place, though. You need some form of data intake to be able to react quickly.
Even if the data isn’t perfect, successful firms use what they have. There is a lot of important data that is simple to get and measure because of digitalization.
Consider how your conversion rate can be used to assess the performance of your entire client experience.
This might assist you in figuring out whether your conversion rate is improving, declining, or remaining stable.
Your higher-level data will be useful in identifying the complex regions that affect that conversion rate.
However, as you’re fine-tuning your metrics, understanding the overall value this approach is bringing to your firm helps point you in the correct way.
What makes agile transformations successful?
Your judgments on value creation will be guided by the data you gather. To make wise judgments that will propel you toward success, you must have faith in this data.
When it comes to guiding their employees, many leaders are used to relying on their “gut feeling” as the main indicator.
Managers must, however, become more scientific in their analysis of the data as real-world insights become more widely available.
Leaders must accept the figures as an unbiased source of information and, like scientists, place more faith in them than in their presumptions.
These metrics should develop into reliable insights that guide your decisions once data points that measure actual value for the firm have been identified.
Overcoming these obstacles may enable your firm to adopt more effective working methods. A utility firm visited Kilowott in 2015 with the intention of adopting a new digital approach. The plan was developed, however it was never implemented and produced no results.
The customer returned five years later with renewed backing for what was now seen as an essential move.
This time, instead of beginning with strategic planning, they gathered all the departments to discuss how each contributed to the overall operation of the company.
The emphasis shifted from adopting a solely digital viewpoint to defining organizational value and using this as a foundation for developing procedures.
Silos were challenged throughout the workshop to come up with fresh approaches to working that would result in a value chain that was more seamless.
Teams’ perspectives changed when they understood that removing barriers between silos would improve collaboration.
They were able to orient themselves towards a shared objective and take actions in the direction of accomplishing it by changing their perspective to concentrate on what the teams could accomplish together.
The company chose a hybrid method of operation based on the full value chain. The emphasis switched from maximizing the value of their operation as a whole to increasing the total value of individual silos working to meet departmental goals.
To do this, cross-functional multidisciplinary teams had to be formed in order to improve the flow of new business and customer assistance.
The business was able to bridge gaps between silos and work more productively to generate more value overall because of this end-to-end approach.
They are already observing effects from the ongoing change thanks to new KPIs that are being used to gauge value creation.
Key learnings to take with you in your own transformation
We have gathered important insights on what makes a successful change as a result of our years of experience helping them.
Applying the following principles as your organization embraces departmental agility will help position it for success.
Make sure top leadership has approved your request. Although transformations can begin from the ground up, they will never be fully realized without senior leadership’s strong sense of direction and commitment to change.
The importance of the change that is being made must be supported by the decision-makers, who must see it as an essential step in achieving success in the future.
Make connections between silos. The greatest effective change frequently results from gathering your departments in one place (or video call).
Bringing them together to develop fresh approaches to collaboration might help your firm as a whole become more effective and flexible in attaining objectives.
Put a focus on shared success. Every department must contribute to the creation of end-to-end value, making success something that belongs to everyone.
The KPIs ought to reflect this as well. You don’t need to entirely reorganize, but introducing a measure that monitors departments’ capacity to collaborate and generate value alongside your current KPIs will acknowledge leadership support and inspire people to move in the direction of change.
End-to-end value cannot be achieved by your departments overnight. It’s a progressive process that must be continually assessed to match the demands of your company.
However, you will see your agile transformation start to take hold and start producing actual results if you put value creation at the centre of your departmental operations.
Need help in achieving successful agile transformation? Let’s talk!