“Plainly speaking, an agile operating model is the engine that drives the organisation, in order to achieve the strategic objectives.”Nate Nelson, Managing Director, ADAPTOVATE. US office.
The following article builds on our continuing series on the Agile Operating Model, and its ability to cut costs and create efficiencies. Our original video series from the US ADAPTOVATE office can be found on our You Tube Channel.
In this article we interviewed five of our global team on their perspective specifically around the finance and government sectors.
Charles Tan – Managing Director, ADAPTOVATE, Singapore office
One of the things many Finance functions of large organisations are very focussed on, is the issue around large capital expenditure (particularly those around IT). With an Agile Operating Model (AOM), capital would not be allocated in the traditional sense where it is stage gated. Instead the requester will need to continually prove the need for funding.
With AOM, this results in less “wastage” in non-viable projects, or in situations where the scope changes due to a VUCA environment. (VUCA – volatility, uncertainty, complexity, and ambiguity). This helps finance to spend time funding projects that are actually important to the organisation, and reduces the likelihood of requesters “sandbagging” requests to cover for all sorts of contingencies that might never eventuate.
Nathan Nelson – Managing Director, ADAPTOVATE, US office
Plainly speaking, an operating model is the engine that drives the organisation, in order to achieve the strategic objectives.
Crafting a clear vision, objectives, and key results are the precursor to designing the operating model. It’s also only half of the equation. You can have the most pithy and inspiring vision, but without a comprehensive design on how the organisation will transform to meet the vision and objectives, the chances of success are slim.
Designing an agile operating model should remove complexity, not add to it. It should enable collaboration by removing silos within the organisation. It should foster a growth mindset with a focus on “testing and learning”.
And finally, it should create the conditions to empower employees by driving decision-making down into the organisation. All in all, this drives faster speed to market and higher employee engagement. How does this create efficiencies?
Focus – a focus on the most important things with employees that enjoy what they do!
Download our white paper on how you can cut costs and create efficiencies using New Ways of Working.
Steven Walton – Principal, ADAPTOVATE, Australian office
Two key benefits of an Agile Operating Model are continuous prioritisation of work and a measurement culture.
While working at a global investment bank, I saw Agile Tribes using quarterly business review cycles to measure the effectiveness of the work they delivered in the previous quarter, to determine what work to deliver in the next quarter. In some cases, it meant sticking to the plan. However where results showed the work was not giving the desired results, the leaders were able to quickly adapt the plan.
Systematic data collection provided the right information, at the right time to drive data-based decision making faster and more confidently. Within six months they were delivering increased value with no additional operating cost.
Ted Tomoyasu – Consultant & Coach, ADAPTOVATE, US office
The Agile Operating Model can save government utilities money by restructuring the organisation to be more effective and efficient. Starting with your strategic plan, Agile helps align objectives and results from the department head down to each team.
By restructuring your organisation around empowered cross functional teams, we can eliminate the waste of redundant roles, needless coordination between siloed departments and delayed decision making. This allows you to deliver value to the tax payers faster and at less cost.
Tiong Yeow Tan – Agile Senior Consultant, ADAPTOVATE, Singapore office
The Agile operating model merges the top-down strategic insights with an aligned bottom-up practical approach. A quarterly business review (QBR) process in Agile governance promotes that perspective by having each Lead determine the objectives and key results (OKRs) for their specific portfolio.
He/she then works with each team in the portfolio to create team OKRs that are aligned to the portfolio OKRs. The outcome is one that is both strategic top-down yet practical bottom-up. This process also empowers the teams to take ownership and drives towards their goals, compared to a purely directive top-down approach or an anarchic bottom-up approach.
The finance organisation can also leverage on the QBR process to align their budgeting cycles. With the OKRs clarified, there will be clearer visibility on what capital resources are needed to drive the key outcomes.
Similar to the QBR process, the budgeting cycles should happen a couple of times a year instead of our familiar yearly annual budgeting cycle. This will ensure better accuracy and maximise the use of limited resources to drive critical and strategic business outcomes.