Agile strategy management from implementation to governance with people focus

Soren Lyngso, MA (Econ), PMP

Experience shows how weakly established organization structures and objectives make communication and people enter into conflict instead of working together to reach feasible and beneficial results from strategic initiatives.

This paper presents three real life case stories that underpin this fact. All the cases had well-defined scope settings at the outset that lead to management “go ahead” and attribution of vast budgets. All the same, they all failed to deliver or entered into critical problems demanding complete process restructuring and revamped organizations. The cases have some common characteristics that lead to a conclusion about the need for agile strategy management. The audience is asked to identify these characteristics.

People and communication are in focus. These elements present, at the same time, the foundation and primary opportunity for success; and the biggest risk of failure.

The key to agility is teambuilding and measurability. The paper outlines a set of established tools for stakeholder management, for teambuilding, and for bringing organizations in crisis back on track. This framework of tools and techniques used early in and throughout important strategic initiatives has been used to achieve beneficial business results fast, and without any conflict, using the “no excuse for failure principle,” which aligns well with the Agile Manifesto from the agile alliance (extract):

  • Individuals and interactions over processes and tools
  • Working software over comprehensive documentation
  • Customer collaboration over contract negotiation
  • Responding to change over following a plan

Once the best possible team of stakeholders is established, the people in the teams must be involved with the strategic initiative in such a way that they fully understand their responsibilities and contributions (i.e. they know why they are called and they understand the value of their contribution).

The team building processes help ensure full agreement on objectives and scope if used correctly. The presentation of the objectives and the scope help ensure that progress can be measured and evaluated. The basis for this is success factor-based risk management that makes it possible to observe opportunity events and conditions early and to respond and adapt to these for efficient progress.

The conclusion is that all stakeholders must be identified as early as possible and must be treated in such a way that they are happy from initiation to close out of a strategic initiative. In support of their involvement, they need visibly planned for and agreed upon organizational structures, methods framework, object definitions, and communication to be successful and agile.

Why Agile Methods

Agility is About People

Agility is about people. People formulate wishes and requirements. People form teams and organizations for communication. People implement and develop solutions. People ensure the quality of delivered solutions.

People change their minds and adapt their wishes and requirements accordingly.

People enter into conflict and disagreement that can be counterproductive in critically important strategic initiatives.

Based on the agile methods, one can promise delivery of fully accepted information system solutions based on safe estimates. The estimates emanate from standard dialogues with all pertinent stakeholders in the context of fully standardized processes:

  • Stakeholder identification and involvement
  • Business analysis and scope definition
  • Object-oriented solution design.

The dialogues take place in scenarios that help ensure motivation and the best possible contribution from all involved stakeholders to such a degree that these stakeholders want to take ownership of the result – collectively and without conflict.

The agile methods and techniques outlined below are used successfully in industries such as:

  • Finance (Bank and Insurance)
  • Pharmaceutical production
  • Healthcare
  • Oil and Gas Production
  • Logistics
  • District heating production and distribution
  • Electricity distribution
  • Public sector

The core agile principle of the methods is that they promote that the stakeholders take ownership of whatever is delivered from initial ideas and recommendations to working solutions. The final solution, inclusive of the knowledge transferred or shared, belongs to the stakeholders within legal constraints.

A deliverable from the method component tells:

  • Why it was done and why it was done the way it was
  • Where and when it was done
  • Who contributed and agreed
  • How the conclusion was reached and the recommendations established
  • What the costs and benefits are if the recommendations are followed

The methods and techniques cater to strategic initiative establishment and governance that align information system development, implementation, quality management, support, and governance in any industry with corporate strategy.

The Method Framework Used

img

Exhibit 1: The agile strategy management method framework.

All method components are explained with respect to three core quality objects:

  • Organizational requirements
  • Process requirements
  • Solution requirements

The core work processes of implementation, development, and quality management are established in support of agile behaviour, where the concurrent involvement of competent pertinent resources helps ensure fast adaptation to the unexpected and risk-managed situations and events.

The standard processes and documentation used in the core processes contribute to efficient progress tracking and quality management from the start of a strategic initiative to the delivery of the expected result.

The concrete techniques and tools used in all development, implementation, and quality management processes help ensure the full traceability of results from idea to solutions in operation. Traceability is especially important while working agile, where results are adapted continuously to changes in stakeholder attitude and demand.

The methods are used during the different phases of strategic initiatives, where the strategic initiative can be an information system engineering project or a complete business process engineering program, such as the establishment of a new factory.

Agile Strategy Quality Management

The agile quality management standards used in the strategic initiatives comprise:

  • Identification and activation of stakeholders to be involved
  • Communication
  • Team-building
  • Decision-making
  • Documentation.

The quality assurance and the quality control methods of agile strategy quality management, help ensure that the key stakeholders are satisfied with the deliverables.

The standards are complementary to, and sometimes replace, components in industry-specific or national method standards for delivery of solutions with the quite ambitious objective that:

The standards can be understood by hard-core technicians, by top-level visionary leaders, and by all other strategic initiative stakeholders concurrently.

Each strategic initiative stakeholder expects different types of benefits from the initiative, and each one reviews and tests the solution for their own reasons (i.e. their proper “WHY” that you need to understand, document, and communicate).

The agile ongoing quality assurance of the solution, the organization, and the processes of a strategic initiative has contributed to the success of the methods used.

A fundamental capability of the methods is that they allow rapid solution development in order to be able to capture the solution benefits while they are relevant. This capability is ensured by early visualization of the complete solution structure and by ensuring that distinct solution elements can be delivered and made productive early during a strategic initiative.

In the context of methodology, no method is perfect and a great number of different industry, enterprise, or national-specific standards exist. While establishing our specific methods, we have tried to provide the following advantages compared with such other methods and standards:

  • People and communication come before processes, and processes come before documentation standards for the very simple reason that no process can run without resources. Even well-chosen people cannot perform well without good processes to govern their work.
  • Documentation standards are simple and cover only the necessary elements. The documentation standards can be seen as a content suggestion or as checklists. Other methods that promote documentation standards, differentiated between complex and simple projects, are doomed to fail because they never fit all anyway.
  • The methods have one basic requirement to all standard documents, which is that they must answer all “WHY” questions when used, e.g.:
    • Why has the team been established the way it is?
    • Why is this objective important for the enterprise?
    • Why is this activity conducted the way it is?
    • Why does this solution component function the way it does?
    • Why is this test done?
    • Why is this suggested improvement an improvement?
  • By providing only basic standards and norms, you give the teams and the competent people the ability to expand to standards of their own that are required for the production of best quality or, at least, feasible results on their specific tasks. Again, people and teams’ freedom to act is in focus.

Quality Management Objects

Quality management comprises three process management classes with explicitly defined organization requirements, procedures, and result standards:

  • Quality assurance helps ensure that a solution will satisfy the stakeholder needs and requirements. This is handled by establishing agreed-upon standards for all resources, procedures, and solution elements to be involved and/or delivered
  • Quality Control is the ongoing effort to maintain the integrity of a method to be able to achieve the required solution quality. We use communication, interview, and review techniques combined with advanced testing and verification procedures supported by standard quality management information systems to perform and document quality control
  • Quality improvement is the purposeful change of a method to improve the reliability of achieving a required solution. The standards and techniques are improved periodically based on lessons learned

For each quality management process class, we use three quality objects as a foundation for evaluation of the performance of this process class:

  • The solution object defines the properties that are required from the solution to be delivered
  • The process object defines the properties that are required for high performance delivery of the required solution
  • The organization object defines the properties that are required for efficient communication, competence establishment, and decision-making.

Strategy and Strategic Initiatives

The Strategy

Corporate leadership establishes the strategy of a corporation. The strategy tells you why the organization has been established the way it is:

  • Organization structure and geographical locations
  • Products
  • Business operations

The strategy comprises:

  • The corporate vision statement that “paints” a picture of how the corporation would like to be observed and how it observes itself in the future
  • The corporate mission that tells a story about how the corporation intends to contribute to the happiness of its stakeholders. This is the strategy quality objective
  • The confidential corporate objectives known by and sometimes contractually committed to by management tells you the direction followed by the corporation, e.g.:
    • Internationalization
    • Growth by acquisition
    • Profitability (return on investment, return on equity)
    • Sustainability
    • Technological superiority.

All organizations, whether public or private, have a strategy and perform business activity governed by this strategy more or less successfully.

Corporate management translates the strategy into detailed organizational constructions, business procedures, and strategic initiatives that can help ensure and improve the strategy quality.

The Strategic Initiative

The Strategic Initiatives establish the WHY, the WHAT, the WHEN, the HOW, the WHERE, and the WHO concerned with sustaining, changing, and improving business procedures and infrastructure in support of the corporate strategy.

Strategic Initiatives usually comprise information system establishment or improvement in support of business operations.

Strategic Initiatives are programs and/or projects.

Agile Principles

The agile principles of the methods framework help ensure that the strategy stakeholders are happy all the time.

Agility is there to overcome the constraints of mistrust and suspicion among strategic initiative stakeholders. The core agility principle is (author's viewpoint):

Each process from the definition of the initial need for change to the final delivery of the agreed-upon solution contributes to stakeholder trust, mutual respect, motivation, and willingness to take ownership of the solution components delivered.

This is the philosophy behind the processes, tools, and techniques outlined here. They involve the stakeholders in such a way that they feel that the results obtained belong to them. In this way, each process contributes to the motivation for the next one.

One important process is simulated acceptance testing that calls for acceptance of fully functional intermediate results by all pertinent stakeholders as well as stakeholders not directly involved in solution development and implementation, as often as possible.

Stakeholder and Scope Establishment

The initial set of objectives provided by corporate leaders are an indication of what kind of business and stakeholders must be involved in the establishment of the strategic initiative. Too often, these objectives are not defined on a level to establish the full scope of the strategic initiative on their own. Even more often, the strategic initiative teams are unaware of this, and therefore, act in ways that cannot contribute to a feasible solution.

The first action in the establishment of a strategic initiative scope is, therefore, to identify and to have open dialogues with potential key stakeholders to be involved with the initiative, while you respect that you do not know what the real complete scope is yet.

In order to identify all stakeholders to get involved or to be communicated with, you need to look at the complete value chain of the expected solution, e.g.:

img

Exhibit 2: Value chain example (http://bettyfeng.us).

A complete quality-assured scope and stakeholder definition will follow through a standardized brainstorm-based process such as Process Quality Assurance (PQA).

In several cases, leaving out potential key stakeholders has led to the complete failure of strategic initiatives. Some real and recent examples of less efficient stakeholder management are addressed in the case stories.

The Private Bank Case

A large program was established and completed with high costs to automate the private bank, giving all clients access to full web trading and personal portfolio management. The focus was on technology and functionality. The solution was successfully implemented with acceptance tests and client approval before the disaster was discovered.

The bank clients only got involved to enter transactions after the fully integrated solution was technically functional and had been approved from “Friends and Family Testing.”

System usage was expected to reach 3,000 transactions per day, three months after the release date.

The solution never had more than 300 transactions performed by the users in one day and in 90% of the cases, known “Friends and Family” testers performed these transactions.

Millions of dollars were wasted to such an extent that the stock price fell considerably.

Why does SAXO Bank not have this problem?

The DANCOIN Cash Card Case

The DANCOIN project was established to develop and implement a cash card in Denmark. Several patents recognized worldwide came out of this exciting project.

The technical development was a great success. Collaborates such as banks, credit card facilities, and local transportation were directly involved with development and implementation.

A whole city was set up for end-to-end acceptance tests of the integrated solution with service providers, card distribution, and central bank cash and transaction cost clearing. The acceptance test was a great success, also seen from a publication and advertising point-of-view, with press and television coverage.

The failure to succeed occurred because of a lag of communication with the corporate management people from core stakeholders, the local transportation organization, HT. In parallel with the DANCOIN development, HT developed their proper card and card reader devices for their transportation equipment, bus, and train stations, without coordinating this effort with the DANCOIN project.

On the eve of going live, HT refused to implement a DANCOIN reader.

Only inferior usage such as a few parking terminals, a few laundries, and some unmanned newspaper kiosks went into production.

This was not enough to pay off the DANCOIN investment and HT had enough resources to write-off their part of the investment.

Why did the Danish cash card not have success contrary to basically the same card implemented in, for example, Rotterdam, Holland?

Recovery of Projects in Trouble CASE

Strategic initiatives in trouble are most often characterized by that the project teams that have tried to implement a solution for months, just to discover that no real progress has been achieved (except for spending time and money). The sponsor declares the trouble situation once the sponsor becomes aware of the fact – sometimes too late for recovery.

Medical Factory Implementation Project Recovery CASE

The objective of this major program was to implement a big factory to produce medical equipment using cheap raw material to deliver a product of high quality worldwide at a price to be acceptable even to poor people.

The program was run like a project with one project manager facing several internal key stakeholders with considerable internal power and many external stakeholders with legal and political power. The external stakeholders were delivering:

  • Landscape
  • Buildings
  • Production machinery
  • QA equipment
  • Logistics equipment
  • Internal Machine Control Information Systems
  • Administrative SAP-based Information Systems.

The internal key stakeholders were:

  • The future factory manager
  • The CIO managing SAP and central IT
  • The CEO

The work to be done was defined at a very low level (statement of work by the contractor), and a lot of work overlapped between contractors.

Arbitration between contractors and the project manager was handled at weekly project meetings.

More and more conflicts between all parties surfaced very early on. An important reason was that more than one contractor made key decisions and that these decisions were contradictory, or at best, not visibly aligned with the overall project objectives. This, again, was caused by the fact that the overall objectives were very weakly defined.

The project was finally declared to be in trouble because major deliveries were slipping without clear responsibility for the delay.

It was obvious that a program organization was needed to govern all stakeholders. Furthermore, a clearly defined unambiguous requirements specification for each contractor was needed and had to be agreed on by all parties.

The agile contribution to this program (that has since delivered one of the most successful solutions in the history of the pharmaceutical industry) was:

  • Establishment of a program organization based on visible high-level objectives (critical success factors) and clearly defined high-level activities that each one was a major project on its own. The organization, the objectives, and the activities were approved by top corporate management that became visibly involved in the program management. The project manager of the building implementation said, “This process should have been used from the beginning to avoid the troubles that started more than a year ago …”
  • Coaching of the contractor responsible for delivery of the complete factory control system (a network of control computers connected to the numerical control on all production and quality control equipment). The coaching comprised the establishment of the detailed project plan based on use cases for simulated acceptance tests. An object lifecycle-based method was introduced to develop the normalized data structure and content, and the normalized process structure common to all control computers
  • The normalized data and process structure allowed fast corrections of failures and resolution of problems and ensured an efficient interface to the SAP-based order and production planning and control environment
  • The normalized data and process structure was used and verified early on in simulated accept testing (SAT) to prove the efficiency of the solution to be developed and delivered
  • The setup and execution of SAT was established in a realistic scenario supervised by corporate management (the program management team) that signed-off on the solution development and implementation

The methods used were:

  • Process Quality Assurance (PQA) to establish the objectives and a complete project plan that allowed reliable estimation, forecasting, and tracking
  • An information requirements study to identify all core objects with their purpose and usage and to help ensure that they were complete with respect to the overall success factors for the program and the detailed success factors for the control system production and implementation
  • The object lifecycle analysis to detail, define, and normalize all data and process objects in such a way that all control systems could be developed and implemented where needed; ensuring full integration among control computers and with external systems (numerical control and SAP)
  • SAT to prove the feasibility of the data and process structure

Both the pharmaceutical enterprise and the control system contractor implemented major method and organization improvements in order to benefit from the agile methods to be used also in the future.

Why did the disaster or the early closing of the project not occur?

PQA Agile Team Building

The method to get the teams built and to establish agreement about what the solution will be is the PQA process.

PQA is risk management-based, but the focus is opportunity rather than threat.

PQA does not only document what the scope is, it also documents why the scope is defined the way it is. This helps ensure the agility of the PQA-defined scope because if any why-case changes, then the scope must change. The PQA result defines explicitly, the ways an organization needs to change and adapt the scope.

No excuse for Failure Principle

Much too often, we have seen projects and major programs moving along with a weakly defined organization of responsibilities and activities, and where management is impossible.

Such situations lead to a crucial lack of commitment from all involved stakeholders because:

  • Results don't show up
  • Results show up too late to be useful
  • Results show up without the quality that was never agreed upon or documented.

The “no excuse for failure” principle implies:

  • Involved human and technological resources are fully qualified to deliver the required and documented solution
  • The involved resources are allocated and committed in such a way that their work is done and that the results are delivered without costly interruption, delay, and cost overrun.

The “no excuse for failure” principle helps ensure that all involved stakeholders are visibly committed and motivated from start-up to close-out of the strategic initiative.

Simulated Accept-Testing (SAT)

Communication of real measurable results is performed on a regular basis during SAT which allows in directly involved business and development stakeholders to evaluate intermediate results.

SAT performance allows timely and pertinent decisions about required changes to take place without disturbing the progress of a complete solution delivery.

The SAT communication ensures that final Accept-Testing becomes a mere formality because all involved stakeholders already know exactly what they can expect from the delivered solution components during final Accept-Testing.

Conclusion

Qualified and competent people selected to deliver a pertinent solution based on common goals need and deserve the best possible framework of tools and techniques for communication in order to establish a “no excuse for failure” situation without conflicts.

The “no excuse for failure” situation allows the involved teams and people to establish complete and pertinent objectives that can be understood and agreed to by all stakeholders. The involved stakeholders want to take ownership of their part of delivered results.

The “no excuse for failure” situation is established and governed by Process Quality Assurance (PQA), which is the core change management method.

Agile adaptation to changed conditions is ensured by tracking delivered results early by all involved parties that together possess the competences to:

  • Evaluate results
  • Make decisions
  • Initiate work
  • Perform work.

Successful delivery of solutions to the complex needs and requirements of strategic initiatives depends on:

  • Your knowledge about all pertinent stakeholders
  • Your ability to get the stakeholders involved with solution delivery from initiation to close-out
  • Your capability to keep the stakeholders motivated and as happy as possible throughout the strategic initiative.

Works Consulted

All works consulted have brought inspiration to perform the work and to develop the methods described in the white paper.

Agile Alliance. Retrieved from: http://agilealliance.org/the-alliance/

Atre, S. (1988). Data base: Structured techniques for design, performance, and management with case studies. Hoboken, NJ: John Wiley & Sons Inc.

Codd, E.F. (2000). The relational model for database management: Version 2. Boston, MA: Addison Wesley Publishing Company.

Date, C. J. (2005). Database in depth: Relational theory for practitioners. Sebastopol, CA: O‘Reilly Media.

Lyngso, S. (2014). Agile strategy management: Techniques for continuous alignment and improvement. Boca Raton, FL: Auerbach Publications.

Martin, J. (1987). Information engineering. Carnforth, UK: Savant Institute.,

Martin, J. (1989). Strategic information planning methodologies. Englewood Cliffs, NJ: Prentice-Hall, Inc.

Project Management Institute. (2013). A Guide to the project management body of knowlwdge (PMBOK® guide)-Fifth Edition. Newtown Square, PA:Author.

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI or any listed author.

© 2015, Soren LYNGSO
Originally published as a part of the 2015 PMI Global Congress Proceedings – London, UK

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