This is an introductory post regarding my practical experiences with concepts from two lean-agile models and two lean-agile constructs that are emerging in the enterprise lean-agility space for transformation and execution at scale. The two models are Modern Agile and FLEX. The two constructs are OKRs (Objectives and Key Results) and MBIs (Minimum Business Increments). I’ll begin with a brief introductory discussion of the models and constructs, followed by insights and observations from my personal experience in applying these concepts.
Introduction: Models and Constructs
Modern Agile a value-centric model in determining actions for producing desired outcomes (per the core focus of uncovering better ways of getting awesome results). FLEX is an operating model organized around an objective of achieving organizational flow for a series of desired outcomes. OKRs are a construct to explicitly define and capture what outcome is driving an objective and how progress toward that outcome will be measured via a set of quantifiable key results. MBIs are a construct to explicitly define a small increment of value or feedback that validates we’re on the expected path toward an outcome, or to provide data as feedback for considering a change in strategy (aka pivot), and/or to deliver some increment of value that can be supplemented in future increments of value.
Applying these two models and two constructs for business agility transformations at scale within two global organizations has produced quantified outcomes for defined Key Performance Indicators (KPIs) of up to 200% improvement and beyond.
Practical Experiences
Modern Agile is community of people organized around a simple, sturdy, and streamlined approach to organizational execution values in the pursuit of “uncovering better ways of getting awesome results”. It is the embodiment of the following four values (adapted from the original Agile Manifesto): 1. Make People Awesome, 2. Deliver Value Continuously, 3. Make Safety a Prerequisite, and 4. Experiment & Learn Rapidly.
Modern Agile can be a positive step forward from the traditional Agile Manifesto, particularly at scale within a business enterprise, because it uses business terminology rather than software terminology to frame its values. As a result, it is organized around the objective of discovering better ways to create results in business (including software), not simply creating better software on its own. From a positioning perspective in large organizations, that’s a positive step forward toward the broader business receptivity and moves positioning for IT-centric agility toward full Business agility. It also highlights a perspective of “outcomes over output”; meaning the value produced is more important than simply the number of deliverables produced.
A practical challenge begins to emerge as some practitioners apply the Modern Agile principles; I include myself among the group of Modern Agile practitioners. Based on my experiences to date, Modern Agile practitioners tend to initially remain drawn to the importance of the conceptual level (i.e., the four values) and they generally don’t provide broadly applicable practices that need to be applied in order for the principles to emerge within a specific business context. Moving beyond the conceptual level to a corresponding practices level often means driving straight into XP practices; XP practices are powerful for technical excellence in software development, yet they tend to have a rather extensive set of preconditions for success that may not always apply in business contexts.
The gap I’ve seen and experienced with Modern Agile on its own is a lack of a solid set of constructs that create a bridge from the four values to the corresponding practices to be applied. We figured out how to bridge the gap with FLEX.
FLEX is an operating model organized around an outcome of achieving organizational flow. It is characterized by three fundamental objectives: “1) improving the identification of value to be realized by the organization, 2) improving how an organization realizes value for themselves and their customers and 3) creating a learning organization which continues its evolution.” A benefit of leveraging FLEX across an enterprise is that it flexibly and effectively synthesizes multiple sets of lean-agile practices. FLEX thus provides adaptive versatility in the context of business agility transformations; it draws on Lean, Scrum, Kanban, XP, SAFe, and other “at scale” practices in a holistic, systems thinking model. FLEX practitioners, among which I include myself, benefit from an operating model that facilitates identification and execution of a contextually-dependent “best next step” in transforming large enterprises.
Modern Agile and FLEX: a summary of some differences experienced in applying the organizing principles
The focus of the organizing constructs
- Modern Agile frames the values for execution; it does not prescribe practices inherently
- FLEX frames the execution and adoption of lean-agile principles and practices at scale
Moving to execution
- The implementations of Modern Agile, based on my experience, tend toward XP practices. This is very powerful from a technical excellence, software development perspective.
- FLEX effectively synthesizes multiple sets of lean-agile practices for adaptive versatility in the context of business agility. This allows a practitioner to identify small yet powerful increments of transformation and execution value that can grow over time.
Orchestrating execution at scale
- Modern Agile provides no inherent guidance for orchestrating execution at scale, yet it does not inherently prohibit scale.
- FLEX effectively frames all 3 types of scaled execution (“spreading”, “scaling”, and “at scale”); “spreading” is increasing the number of teams; “scaling” is moving up the team-program-portfolio hierarchy within an organization; “at scale” extends across all functional domains within an organization (e.g., IT, Product, Operations, Strategy, Finance, HR, Legal, Go To Market, and Service, among others).
Outcome over Output
- Modern Agile is consistent with OKRs (Objectives and Key Results), which is powerful for business alignment; Modern Agile directly emphasizes “outcomes” (the impact and value delivered) over “output” (the number of deliverables produced).
- FLEX introduces MBIs (Minimum Business Increments) which are powerful for business alignment with delivery execution; MBIs are the smallest increment of value that can be defined, created, and consumed.
Putting it into action by leveraging two key constructs: OKRs and MBIs
At two large complex organizations (one in Healthcare Analytics with 3,000+ people and one in Financial Services with 10,000+ people), we bridged the gap between concepts and execution by conjoining two constructs: OKRs for business value alignment and MBIs for lean-agile delivery alignment. That combination of constructs subsequently opened the door for execution of business agility operating models such as FLEX, while maintaining relatable terminology as with Modern Agile.
We leverage OKRs (Objectives and Key Results) for “business outcomes” as follows:
- The OKR is defined as what outcome is driving the objective and how will progress toward that outcome be measured via a set of key results.
- KRs (Key Results) are quantitative metrics that we use for measurement. This allows for cumulative measurements, particularly when there are potentially multiple contributing paths to value, to be directly combined; the combination of measurements is achieved by drawing connections between a KR from one OKR to a related KR in another OKR.
- As we connect multiple OKRs across the organization, through their related KRs, they become “shared OKRs”.
- Connecting OKRs as “shared OKRs” provides a traceability framework through the connected KRs at different points across the organization.
- To enhance engagement and transparency, we ensure allwork is connected to an OKR at some level within the OKR tree.
- Leveraging “shared OKRs” for traceability has produced 90+% dynamic traceability and bi-directional visibility in line of business execution.
We leverage MBIs (Minimum Business Increments) for “delivery increments of value”.
- MBIs allow us to incorporate delivery risks, as well as business value, into traceable units of execution (note: delivery risk is a context-dependent representation of the risks inherent for delivering a defined increment of valuable scope).
- The MBI is defined as a small increment of value or feedback that validates we’re on the path expected, or provides data to consider a change in strategy (aka pivot), and/or delivers some increment of value that can be supplemented in future MBIs.
- The seemingly simple incorporation of delivery risk into the discussion between the product management team and the delivery team has enabled an increase in delivery predictability from 54% to 95+%.
Benefits of Using OKRs and MBIs, in the context of Modern Agile and FLEX
Here are some of the benefits realized using ORKs and MBIs, in the context of Modern Agile and FLEX, within two global organizations:
- value delivery predictability was reliably increased from 54% to 95+%, producing a 175% effectiveness increase.
- SG&A cost was reduced by 25% for program and portfolio management, and a 50% increase in capacity for portfolio management was delivered, producing a 200% effectiveness increase.
- full objectives-driven alignment across all C-suite domains, down to the level of each team member, produced 90+% dynamic traceability and bi-directional visibility in line of business execution.
- shortened product deployment timeline18%.
- reduced NPS detractors by 48%.
- reduced unplanned outages by 96%.
- aligned and fundedteams based on OKRs for service-oriented delivery.
- cross-organizational alignment contributed to driving collaborative execution of a new digital innovation resulting in multi-million dollar client revenue realization.
More to come on this through a collaborative series of future blog posts.