Definition

enterprise agility

What is enterprise agility?

Enterprise agility is a paradigm for scaling agile methodologies beyond development teams. Successful agile transformation efforts can increase customer satisfaction, reduce operating costs and facilitate employee engagement. Some of the hallmarks of enterprise agility include smaller cross-functional teams and smaller, more iterative development cycles informed by the appropriate business metrics to scale agility efforts.

Enterprise agility is growing in popularity due to the quicker pace of change brought by digital disruption, the COVID-19 pandemic, climate change and new regulations. Agile organizations that have seen success in development are in the best position to extend these practices across the organization to improve the impact of agility across more aspects of the business.

Enterprise agility initiatives extend across more diverse teams than traditional agile approaches that focus on IT-centric roles. A traditional agile team may include developers, testers and operations teams often referred to as DevOps. Over the years, various experts have expanded this to include business subject matter experts (BizDevOps), security teams (DevSecOps), data engineers and data scientists (DataOps).

Enterprise agility is the natural extension of core agile concepts across more varied teams that may include HR, legal, finance, different engineering disciplines and marketing teams.

In traditional software development, the term Agile with a capital "A" denotes a particular widely recognized methodology. There is no corresponding agreement on the specific scope and processes of enterprise agility. Various sources characterize it as ranging from agile for big projects to a way of coordinating agile teams across the enterprise. However, it seems to be the consensus that enterprise agility involves improving communication, establishing cross-functional teams and coordinating around actionable metrics.

It should be noted that the process of becoming an agile organization is no easy task and is fraught with many risks. Many organizations have struggled with adopting agile software development practices. Adopting an agile operating model across more aspects of the business faces challenges around reorganizing teams, rallying around actionable metrics and executive support. 

Popular agile software frameworks that can be extended to support enterprise agility include the following:

Benefits of enterprise agility

Some of the key benefits of enterprise agility include the following:

  • higher customer satisfaction;
  • better alignment between new business ideas and customer needs;
  • increased employee engagement through shared goals;
  • more timely and honest communication;
  • improved operational performance; and
  • more accurate budgeting and planning.

Measuring enterprise agility

One of the biggest challenges in adopting enterprise agility lies in identifying the appropriate metrics that support traditional business goals in conjunction with agile process goals. A good starting point is to inventory and simplify objectives and key results, which are common in high-performance organizations like Google, Microsoft and LinkedIn.

Defining the appropriate metrics for enterprise agility is not as straightforward. Teams need to think about improving business metrics in concert with improving the processes required to do this better. Value stream mapping tools can help craft and monitor more nuanced metrics. 

Some starting points for specific metrics for tracking enterprise agility efforts include the following:

  • cycle time for the creation of new value;
  • lead time required to get started;
  • work per unit of new value;
  • the time needed to cancel a failing project;
  • project estimation accuracy rate;
  • amount of work measured in user story points; and
  • mean time to resolve a problem.

Strategies to become an agile organization

A successful shift to greater organizational agility generally starts with a strong focus on improving the customer value proposition in small increments. It is also essential to address the human and emotional intelligence aspects to help bring the whole team on board. In general, change is hard and enterprise agility efforts can involve changes across organizational structures, processes, tools and metrics. 

Key elements that can facilitate an agile transformation across the enterprise include the following:

  • Develop a shared purpose that inspires employees and delights customers.
  • Create an agile team culture that increases communication within teams and decreases communication across groups.
  • Adopt a product versus a project mindset to facilitate incremental progress and faster learning.
  • Find ways to include more perspectives at the outset of new projects using practices like Three Amigos meetings.
  • Encourage everyone to train across roles.
  • Create a business development workflow that allows a team to create value in small increments.

Examples of agile organizations

Spotify implemented an agile organizational structure around guilds, chapters and tribes in 2012. This improved communication and streamlined many business processes. Other companies took note after reports of how this facilitated rapid company growth in concert with employee satisfaction.

Barclays bank adopted an enterprise agile approach to align increased output with increased value creation. This helped the bank identify bottlenecks outside of the traditional development process, such as security and auditing.

Panera Bread adopted the DAD framework to improve the relationship between IT and the rest of the business. This accelerated the company's digital sales efforts, simplified mobile ordering and increased customer satisfaction.

Spark New Zealand, the country's leading telco, adopted agile work processes across the company when it was lagging innovative startups in 2012. It aligned 40% of employees into smaller cross-functional teams and gave each employee veto rights. This put the company back on a growth trajectory within the first year.

This was last updated in November 2021

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