Agile methods have improved project performance, but that doesn't seem to roll-up at business level. There is a need to create 'butterfly effect' to amplify smaller actions into large outcomes. In this presentation made on 20-Aug-2011 at Agile Hyderabad 2011, I examine some of the issues that need to be addressed to enable hi-end agility in large R&D enterprises.

1. Achieving High-end
Agility in Large R&D
Enterprises
Tathagat Varma
PMP, PRINCE2, CSM, Sr. Member IEEE
Sr. Director Business Ops, Yahoo! R&D India

2. Disclaimer: these are my personal
views

3. Topics
• A Decade of Agility
• Business impact
• Enabling Hi-end Agility

4. What is Agility?
• Agility is the ability to change the body's
position efficiently, and requires the
integration of isolated movement skills using a
combination of balance, coordination, speed,
reflexes, strength, endurance and stamina.
• In business, agility means the capability of
rapidly and efficiently adapting to changes.
Recently agility has been applied e.g. in the
context of agile software development and
agile enterprise.
• http://en.wikipedia.org/wiki/Agility

5. Where is Agile used today?

6. …and where it is not?

7. Why do they adopt Agile?

8. And the results are showing…
Aa

9. But…

10. Large teams?

11. Distributed teams?

12. Large companies?

13. Company-wide?

14. Successful?

15. Scalable?

16. So…
…with
Agile?

17. What are the barriers to agile adoption?

18. …and what are the concerns?

19. Meanwhile…

20. Reported profit margin for S&P 500 for
last 25 years is only 5.5%
http://runningofthebulls.typepad.com/toros_running_of_the_bull/2010/07/valuation-update.html

21. IT Operational Budget as Percentage of
Revenue: 2006-2011
Source: Computer Economics, 2011

22. And the software budget is?

23. IT Budgets in Fortune 100 companies
77 of IT budgets to
%
just maintain
status quo
http://blogs.sungard.com/as_cloud/tag/top-cloud-computing/

24. Let‟s do some math!
1.6%
IT Budget
0.3%
Of Revenue
19%
Software

25. „Savings‟ if Agile delivered…
10x: 0.27%
5x: 0.24%
2x: 0.15%

26. Loss in Agility
Business ~5-
6%
Portfolios
Agile Projects
2-10x (?)

27. A typical large company

28. Planning Horizon and Execution Cycle
Strategy
3-5 years
Portfolio
1-3 years
Projects
3-6 months
Sprints
2-4 weeks

29. Planning Onion

30. High-end Agility
“Ability to turn the Titanic”
“Ability to shut-down
Fukushima”
Agility @ scale
Agility @ light-speed
Agility across the organization

31. What is this?

32. Butterfly Effect
• “Predictability- Does the Flap of a Butterfly's Wings in
Brazil Set Off a Tornado in Texas?” – Edward Lorenz,
1972
• The butterfly effect is a term used in Chaos Theory to
describe how tiny variations can affect giant systems, and
complex systems, like weather patterns. The term butterfly
effect was applied in Chaos Theory to suggest that the
wing movements of a butterfly might have significant
repercussions on wind strength and movements throughout
the weather systems of the world, and theoretically, could
cause tornadoes halfway around the world.
• What the butterfly effect seems to posit, is that the
prediction of the behavior of any large system is virtually
impossible unless one could account for all tiny factors,
which might have a minute effect on the system. Thus large
systems like weather remain impossible to predict because
there are too many unknown variables to count.

33. Who is this man?
Mohamed Bouazizi

34. And who is this man?

35. Enabling Hi-end Agility
Product
Creation
Process
End-to-
People
End
and Teams
Execution
Hi-end
Agility

36. People and Teams
• Cross-functional Teamwork
• Cross-silo Collaboration
• Cultural Transformation

37. Cross-functional Teamwork
• Not just the traditional development teams
• Business planners, strategists, financial
planners, marketing, sales, customer support,
manufacturing, partners…everyone needs to
be involved
• There are no “chicken” in this game!

38. Cross-silo Collaboration
• No man team is an island
• Silos lead to agency theory at work –
“optimized parts, suboptimised whole”
• Cross-silo, or horizontal efforts ensure
collaboration with all relevant stakeholders not
just a given project but for the entire business
• Get as many fingerprints as required

39. Cultural Transformation
• Engineering teams „understand‟ concept of
agility to an extent – other groups might not!
• Impedance mismatch between Agile
engineering teams and traditional business
teams
• Needs a centrally coordinated change
management effort

40. Product Creation Process
• Planning process
• Decision-making process
• Innovation networks

41. Planning Process
• A long-term strategy sets the direction and
pace, but could also limit agility
• Need to stay focused but flexible to changes
• A way to planning could be
– 70%: long-term strategy
– 20%: short-term mid-course adjustments
– 10%: play by the ear

42. Decision-Making Process
• Perhaps the bane of large organizations!
• Quickening-up the process is key –
irrespective of the outcome of decision
• More communication leads to faster and
better decisions (and buy-in)

43. Innovation Networks
• Productizing innovative ideas is true agility!
• Democratize innovation
• Make it safe to fail
• It takes a village to raise a child
• Rapid resolution of ideas

44. End-to-End Execution
• Agility at project-level
• Program Management
• Communication

45. Agility at project level
• Faster validation of hypothesis
• Minimize WIP (Work In Progress)
• Improve leadtime

46. Program Management
• Lockstep all functions required to build and
launch the product
• Provide, manage and ensure two-way linkage
between strategy and operational plans
• Optimize the „whole‟, a la Lean

47. Communication
• Highly underrated at team level
• Execs need actionable communication

48. So, where is Agile in Gartner Hype Cycle?

49. Conclusions
• There is loss of agility in large
organizations – project-level benefits
don‟t amplify at business level
• This is not just about applying agile / lean
principles to software development team
alone – we need to create „butterfly
effect‟
• Hi-end agility can be achieved by
creating interlock of people, process and
execution on top of project-level agility

50. References
• State of Agile Development Survey 2010,
http://www.versionone.com/pdf/2010_State_of_Agile_Development_Survey_Resul
ts.pdf
• http://www.ambysoft.com/surveys/
• http://www.wealthscribe.com/?p=70
• http://anagilestory.com/2011/07/20/can-agile-work-in-big-organizations/
• Predictability: Does the Flap of a Butterfly's Wings in Brazil Set Off a Tornado in
Texas? – Edward Lorenz, 1972,
http://eapsweb.mit.edu/research/Lorenz/Butterfly_1972.pdf
• Why Agile doesn‟t sell with Management, 21-Jul-2009,
http://managewell.net/?p=550
• http://www.wisegeek.com/what-is-the-butterfly-effect.htm
• http://managewell.net/?p=1118
• http://www.infoq.com/interviews/larman-scrum-large-organizations

51. Thanks!
Twitter: @tathagatvarma
Blog: http://managewell.net
Email: tathagat.varma@gmail.com
Presentations: http://www.slideshare.net/managewell