How Fortune 500 Companies Transform “Agile” From Buzzword to Business Model

By now, a good majority of us know how the “agile” development process has seeped into other parts of the organization. It turns out that the whole concept of iterating quickly, failing fast, and continuously improving based on experience and customer feedback isn’t exclusive to developers. There’s clearly an upside for any company that shifts its model from waiting for a perfect alignment before launching a new product, introducing a new initiative, or adopting a new business process versus one that thinks, dives in, learns, and commits to continuous, iterative improvements. As many teams adopt agile methods, namely marketing, sales, and customer service, the C-suite is taking note. Especially as customer demands and expectations change at an unprecedented pace, largely driven by the ubiquity of new digital technologies.

Over the past year, more than 350 CXOs at Fortune 500 companies across various industries told us how new technologies impact them, how disruption is a necessary strategy, and how they quickly need to seize and respond to these new opportunities. While some explicitly talked about the need to adopt agile processes, others implied its increasing importance. Here, a roundup of thoughts from the C-Suite sheds lights on what drives, disrupts and distracts top organizations from reaching their goals.

Among the gems was this succinct take on the state of business today, “If you aren’t a disruptor, you will be disrupted,” one leader told us, which is why “becoming agile” and “driving through disruption” are the recurring themes demanding the C-suite’s attention.

Disruption as a managed process

One of the most profound challenges within larger companies is how to structure the organization to be disruptive. Unlike a small startup that can pivot and try different things quickly; enterprise-level disruption impacts the entire value chain. To do it well requires a powerful, collaborative ecosystem that touches many, if not all pockets of the company with the goal of responding quickly to new opportunities.

“You now need to worry about the delivery of the product or service and how the entire value chain can be disrupted or changed,” one executive shared.

Another executive noted, “Time to market is key even if the final strategy isn’t in place.”

Culture is the key; quality is the struggle

When it comes to adopting more agile environments and introducing disruption as a positive circumstance, corporate culture is the biggest piece of the puzzle for the C-suite. Primarily because it requires finding a balance between empowering teams and maintaining control. This becomes a critical hurdle when the perfection and quality that often made these companies successful is now being tipped on its head, requiring a completely different mindset.

Take for example, this insight from a traditional Six Sigma organization: “As a Six Sigma company, we were focused on quality and process,” said an executive. “But digital [disruption] values agility and speed, which changes the way we need to think of product management. There are cultural impediments that we’ve had to rethink to get people to align to what they have to do.”

That is the main struggle: how to build a culture and put together teams that are agile and able to capitalize on disruptive ideas quickly, while delivering the security, services, and quality that people associate with your brand. Getting all of those things in alignment is complex. This is where prescribed culture intersects team dynamics.

The team is key

How to construct the sort of team an agile enterprise requires is the central driver of this shift, as well as what can prevent it from scaling if assembled incorrectly. The challenge resides in fostering a culture and coaching teams to embrace agile environments, especially ones that are in the midst of failing fast, while simultaneously determining the best path to progress, resulting in operationalized and scaled agility.

“This change requires people with an innovative approach, good process minds, and culture to create the right environment together with the right technology,” one leader told us. “Team composition and skills are crucial, and it isn’t that easy to accomplish.”

Putting it together

One global company achieved this ideal by turning its way of working into practices and methods that they consistently measure and improve. They first addressed their process-oriented culture by simplifying how they approach and execute tasks, reducing redundancy. Next, they created cross-functional, self-directed squads of several people, which then rolled up into larger tribes, which then became domains. Third, they created a training curriculum and instituted a coaching team to ensure the ideas, best practices and processes would naturally flow downstream and filter through the organization.

While every step was critical to the organization becoming more agile, one of the most important elements was to build cross-functional teams. For example, if marketing leaders are finding it hard to define an agile approach that works for one of their teams, they’ll find tremendous benefit in tapping into the wisdom of a cross functional team. In this scenario, the focus is on working quickly to solve a client challenge or market need by using the collective wisdom across the company. This can remove some of the hierarchical issues that fly in the face of agile methods.

Building Agility into the Muscle Memory of an Enterprise

When a company has already done the hard work and achieved the status of being an industry leader, developing strategies and methodologies to maintain that position must become second nature. Yet as they get bigger and business processes are ingrained in the culture, agility becomes more challenging.

Of course, agility is less of a hurdle for the upstarts hoping to displace those industry leaders. With less structure, process, and customers to bring through that process with them, upstarts are more nimble yet they often lack the brand name recognition and power of a larger, more established player. This is one of the reasons why so many of us are still mesmerized by the scrappy upstart that takes on an industry giant – and wins. It’s also why enterprise leaders are working together to address their shared concerns as they move to more agile environments and strive to scale that agility.

“Most companies are doing agile right now, but very few are doing it at scale,” one executive told us. “That is where we need help.”

After talking to 300 executives all striving for disruption, we can tell you that the universal requirements for success include: simplifying processes, building teams, including those that are cross-functional, and injecting the agile mindset into the culture of organizations so that it becomes habit.