Agile methods have become a de-facto standard in software development. Software is everywhere today - so Agile has been a big step for the industry, though not yet achieved by all. However, its still not enough. The business landscape has changed dramatically over the past 10-15 years. Startups have grown into dominant businesses. And the digital economy is flooding any business corner across the globe. All of this is fostering exponential growth of new ideas, leading very quickly to exponential change. While the future appears even faster, predicting it has become harder. And the only thing we know: what we need for this are more adaptive businesses, end-to-end Business Agility. In this talk we will explore the adaptive organization for the 21st century.

1. Beyond Agile
Adaptive Organizations for the
21st Century
Mike Leber
Agile & Lean Coach
Twitter: @michael_leber
http://agileexperts.at

4. @AgileExperts | http://agileexperts.at
The Case for Adaptive Organizations
Focusing on Value – Sensing the Environment – Constantly & fast Adapting
Current State
Vision
Future is still uncertain,
but arriving
faster than ever
bringing change at
ever increasing speed!
We need end-to-end Value
Creation!

5. @AgileExperts | http://agileexperts.at
Adaptive
Organization
Customer &
Product
Discovery
Leadership
Operational
Excellence
Capability baseline for a fitter
Business
Understanding
our business
and fast
changing
markets
better
Providing engaging
structures
and movement for
adaptation

6. @AgileExperts | http://agileexperts.at
Agile Manifesto
What did we Learn?
• Purpose, Product, Value
• People and Collaboration
• Trust and Self-Organization
• Adaptation
Where did we come from?
• Organizational Silos
• Low levels of Collaboration
• Challenged Quality of Deliverables
• Unflexible regarding Change
• Low Customer Focus
agilemanifesto.org

7. Niklas'Modig,'PärÄhlström

8. Niklas Modig, Pär Ählström

9. Doing versus Being
Practices
Principles
Values

10. @AgileExperts | http://agileexperts.at
Organizational Improvements Emerge
ChangeRequests
Mean
Tail
Left
Shift
Right
Shift
Growth of
Capabilities
Copyright:
Lean Kanban University, David J Anderson

11. @AgileExperts | http://agileexperts.at
Potentials for Operational Improvement
Time (in Quarters)
#CRs
10
30
50
Reduction of Backlog. From this
point on, the service meets the
arrival rate of requirements
240% Improvement
Throughput
Time (in Quarters)
Avg.TimeforSolution
indays
25
75
125
90% Reduction of
end-to-end Cycle
Time*
• Increase in throughput
• Drastical reduction of
lead time
• Shorter wait time for
customers
• Faster feedback
• Improved quality
• Higher reliability and
predictability of system
Copyright:
Lean Kanban University,
David J Anderson

12. @AgileExperts | http://agileexperts.at
3 Major Focus Points
Sustainability
§ Limit Work in Process
§ Avoid overburdening
§ Gain more focus
§ Understand risk, capability
§ Allocate capacity
§ Increase predictability
Survivability
§ Lead business
§ Make informed strategic decisions
§ Increase the right capabilties
§ Drive feedback loops
Service-Orientation
§ Drive out variability across an organization
§ Make educated management decisions
§ Scale out business
See: „Kanban Agendas“ via Lean Kanban University

13. Team vision and
discipline over individuals
and interactions (over processes
and tools)
Validated learning over
working software (over
comprehensive documentation)
Customer discovery over
customer collaboration (over
contract negotiation)
Initiating change over
responding to change (over
following a plan)
Kent Beck’s
Beyond Agile Manifesto
http://www.forbes.com/sites/stevedenning/2011/05/04/innovation-applying-inspect-adapt-to-the-agile-manifesto

14. • „...age of hypothesis
testing instead of
feature
development...“
• „... a new world
opening up in 2015-
2016“

15. Agile Methods
alone don‘t
make a
Business
Agile

16. Eric Ries
Build – Measure - Learn
You can do
everything right
and still be
totally wrong!

17. ?
„In the Next 10 Years,
40% of the Fortune 500 Companies will be gone.“
John M. Olin School of Business,
Washington University

18. Organizations - Not always what we think
Exaptation
Paypal
First built for
Palmpilots
Twitter
Was a
podcasting
company
Freshbooks
Was invocing
for a web
design firm
Wikipedia
Was to be written
by experts only
Hotmail
Was a database
company
Autodesk
Made
desktop
automation
Everything is going
exponential in VUCA
World
Evolution
Disruption
Flickr
Was going to
be an MMO*
* Massively-Multiplayer-Online Game
Hyper-Collaborative
Global Economy

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Innovator‘s Dilemma
https://osmoticinnovation.wordpress.com/tag/innovators-dilemma/

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3 Horizons of Business Playgrounds
„The Alchemy of Growth“
Merhdad Baghai, Stephen Coley, and David White, 1999
Key Challenges - Too much Focus on H1
§ Shareholder Value and Quick ROI
§ Bonus Payments
§ Budgeting Process
§ Avoid Exeriments
§ Limit to current segments
§ No longer term impact
Today‘s revenue
growth + tomorrow‘s
cash flow
Options for future
high-growth
businesses
Today‘s cash-flow

21. It is not necessary
to change.
Survival is
not mandatory.
W.E. Deming

22. @AgileExperts | http://agileexperts.at
Existing Biz ModelsNew Biz Models
Continuous
Exploration
Continuous
Improvement
Leadership
Behaviors Values
Structures
Exploration
Strategy
Innovation Ideas
Portfolio
Exploitation
Options
Balance
Commitment
2 Engines for Growth

23. @AgileExperts | http://agileexperts.at
Existing Biz ModelsNew Biz Models
Leadership
Behaviors Values
Structures
Exploration
Strategy
Innovation Ideas
Portfolio
Exploitation
Options
Balance
Commitment
Develop Sensors for Adaptation
§ Flow efficiency and Slack Time over Capacity Utilization
§ Validated Learning over Mass of Deliverables
§ Understanding Stakeholders and Business Risk over Blaming
§ Risk Aware Decisions over HIPPO Enforcement
§ Organizational Liquidity over purely Scaling up a Business

24. @AgileExperts | http://agileexperts.at
Innovation ≠ Incubator
Innovation ≠ Accelerator
Innovation ≠ Startup
Innovation ≠ Lean Anything
Innovation ≠ Reorganization
These are all physical places to do
innovation Steve Blank

25. @AgileExperts | http://agileexperts.at
Innovation Succeeds
• Where there is a path to adoption
• When it fits into the overall mission and strategy
• Because it performs, has metrics, …
• It is managed as an innovation portfolio
• And has management support (the spirit of “yes”)
Continuous Innovation requires
New Management Tools
Steve Blank

26. @AgileExperts | http://agileexperts.at
Discovery and Exploitation
„Lean Enterprise“, Jez Humble, Joanne Molesky, Barry O‘Reilly

27. @AgileExperts | http://agileexperts.at
http://blog.gardeviance.org/2015/03/on-pioneers-settlers-town-planners-and.html
Pioneers, Settlers, Town Planners
Simon Wardley

28. @AgileExperts | http://agileexperts.at
Dual Operating System
John Kotter
John P. Kotter

29. Gary Hamel, American Management Expert
Right now, our companies have
21st century Internet enabled
business processes, mid 20th
century management processes,
all built atop 19th century
management principles.

30. @AgileExperts | http://agileexperts.at
Drivers for More Change
• Digital Economy – Declining Transaction Cost
• Individualization – Customization for mass
markets
• Flexibilization – Alliances, Workforces
• Demographic Change
• People as Adults – Having a Voice

31. @AgileExperts | http://agileexperts.at
Change is speeding up
Digitalization
Industrie 4.0

32. @AgileExperts | http://agileexperts.at
5Ps for better Ways to Organize
• Purpose – Focus on „Why“
• People – Humane Values, Engaging, Inspiring
• Process – Value generating, adaptive
Capability
• Product – Validation, Learning, Value
• Platform – Engaging across multiple Channels
Sense & Respond across the
whole Organization

33. @AgileExperts | http://agileexperts.at
Exponential Organizations
http://frankdiana.wordpress.com/2015/04/01/exponential-organizations/
Salim Ismail,
Michael S. Malone,
Yuri van Geest
We need to shape
better Environments for
People Collaboration

34. Finally
it is all
about
People

35. @AgileExperts | http://agileexperts.at
Engaging Leadership
Jurgen Appelo

36. Multiple Purpose Dimensions
Copyright: Stephen Parry
Business Purpose
People Purpose Customer Purpose
Common Purpose
„We all work for the same
Company, but we live
In different worlds“
Thomas Queisser
Purpose
Measurement
Acitvity
!?
? ?

37. Human beings are born for Adaptiveness
Our old Systems eliminate this Gift

38. Carol Dweck
Strong Opinions,
weakly held
Bob Johansen, Palo Alto Institute for
the Future

39. @AgileExperts | http://agileexperts.at
People do not generally fear change!
People do not fear to work on
challenges.
What they very often miss, is a
Trustful, Engaging and Inspiring
Environment
where they can
Collaborate, Experiment, Learn, Grow.

40. @AgileExperts | http://agileexperts.at
IUMRING TQ GQNGIUSIQNS
What do you read?
Copyright: Mike Rother

41. @AgileExperts | http://agileexperts.at
IUMRING TQ GQNGIUSIQNS
Our brain automatically fills in
blanks, instead of saying to us
“Sorry, I don’t know yet”
Copyright: Mike Rother

42. @AgileExperts | http://agileexperts.at

43. Change that Fits
„Lean Change Management“ Cycle by Jason Little
@AgileExperts | http://agileexperts.at

44. Agenda for an
Adaptive Organization
• Outcome over Output
• Educated Commitment
• Managing Systems not People
• Growing Vision, Purpose & Values
• Leveraging Humane Potentials
• Nurturing Creativity, Collaboration, Learning
• Focused Experimentation
• Challenging and Reinventing established Models
@AgileExperts | http://agileexperts.at
Disrupt or be disrupted

45. Adapt
Keep growing by Reinventing
@AgileExperts | http://agileexperts.at