After much hand wringing and collaborative sessions with teammates (most notably fellow Muleys Andrew Latham and Alison Jarris) and customers, a framework for how to think about agility has emerged that suggests a path about how to measure it (while not falling victim to Goodhart’s law).
For well over a decade, becoming more agile has been a top priority for businesses. Digital-born leaders like Amazon, Netflix, and Google have driven customer expectations sky high, putting the pressure on for enterprises to deliver. As of yet, here is still no industry standard definition for how to measure and track agility. While most professionals would agree that agility is primarily about speed, once people start attempting to put some robustness and quantification around it, the consensus starts to fragment.
Enterprise agility: What is it and how should we think about it?
Despite the lack of industry consensus on how — or even if — agility can be measured, my collaborative team generated at a simple to understand definition that has yet to fail any offered pressure test. While many enterprises reduce agility to being relevant in a technology systems context, one specific concept that drove alignment from both our collaborative team and every executive we shared it with was that agility for enterprises can be seen and felt outside of technology, such as processes, offerings, labor sourcing, and business and financial models. Based on insights from our work helping more than 1,400 customers digitally transform their organizations, we’ve come up with the following definition of Enterprise agility.
Enterprise agility (n): the ability to affect change within the enterprise quickly, easily, and without impactful error.
Let’s unpack each of the concepts in this definition:
- Affect change: Agility isn’t specific to code changes. Change in this context can can be thought of in multiple ways (e.g., feature change, new product development, content change, culture change, go-to-market strategy change, business model change).
- Quickly and easily: Quick and easy represent the amount of time and effort from concept to implementation of the change. Improvements here show up in ROI calculations given that there is a lower expenditure of labor and time with a corresponding faster payback period for investments.
- Without impactful error: Failing fast is a virtue in an agile enterprise. Agility is in part measured by an enterprise’s ability to prevent errors from negatively impacting business KPIs.
- Demonstrating agility: If an enterprise can affect change in ways that meet at least one of these four criteria, then the enterprise can be thought of as demonstrating agility: across multiple scopes, in shorter time frames, with lower labor effort needed, and with lower risk to business KPIs.
Agility through the loop: What is the OODA Loop?
Every so often, in operational circles, you are likely to hear the term “OODA Loop” which refers to an information processing cycle that crossed over from military usage to a host of other domains and is often viewed as a foundational concept for many of today’s common methods of achieving system level improvement including agile, LEAN, DevOps, and others.
The OODA loop concept and term were developed by US Air Force Colonel, John Boyd. Boyd modeled the information processing cycle for fighter pilots in the throes of combat by breaking it down to four interrelated and overlapping processes through which pilots continuously cycle:
Observation: the collection of data by means of the senses
Orientation: the analysis and synthesis of data to form one’s current mental perspective
Decision: the determination of a course of action based on one’s current mental perspective
Action: the physical playing-out of decisions
This decision cycle of observe, orient, decide, and act, drove extraordinary results in the military context and is now also often applied to understand commercial operations and learning processes across multiple industries. The OODA Loop approach favors agility over brute force when facing off against opponents in any endeavor where time is a critical factor.
An entity, whether an individual or an organization, that can process this cycle quickly, observing and reacting to unfolding events more rapidly than an opponent can thereby “get inside” the opponent’s decision cycle and gain the advantage.
How does the OODA Loop relate to agility?
“The only sustainable competitive advantage is an organization’s ability to learn faster than the competition.” – Peter Senge, Society for Organizational Learning.
The notion of the OODA loop is embedded and referenced in a wide array of industry publications on lean, agile and DevOps including but not limited to the feedback to synthesis cycle of the OODA Loop is often compared to “Build-Measure-Learn” from Eric Ries, and PDCA from John Deming. Notable referencers of the OODA Loop as a basis for understanding enterprise agility include Eric Ries, Adrian Cockroft, and Microsoft.
The common thread in these oft-cited tools is the learning/change cycle experienced by people in a business/team context. The ability to complete the OODA Loop is akin to completing the learning/change cycle in an business setting and is widely considered to be the foundation for understanding and shortening cycle time to improve agility.
When we take a step back from agile as a methodology and look a the circumstances that made it popular (aside from everybody being frustrated with the myriad of shortcomings of waterfall), we can recognize that one of the core motivations was to help enterprises of all sizes become more responsive to changes in their environment. Aligning around a model that prized smaller units of work in a rapidly changing context, rather than “big bang” delivery where in-project change events are seen painful conflicts to be avoided at all costs, spurred transformational efforts whose effects are still being processed by teams and companies across the globe.
In part two of this blog post, I’ll explain how to reframe agility for the modern enterprise at scale with industry-leading examples. For more a deep dive on enterprise agility models, download our hands-on guide to digital transformation.