As businesses face ever-changing market demands, technological advancements, and competitive landscapes, they need more flexible methods and processes to deliver products or services with greater speed and efficiency. This is essential for adapting to rapidly evolving markets. In the process of organizational agile transformation, simply improving processes and organizational structures is far from sufficient. Agile transformation requires enhanced team collaboration, transparent communication, and continuous feedback to facilitate ongoing adjustments and improvements. Transformation must emphasize continuous feedback, self-organization, iteration, and adaptability. Below, we will share two case studies of organizational agile transformation to explore the key points and challenges in this process.
Your AI-powered meeting assistant — Huddles
Case Study 1: OKRs Empower Organizational Agile Transformation
Emancipet is a non-profit organization in the United States that establishes low-cost veterinary clinics in underserved communities, trains non-veterinary technicians, provides services at affordable rates, and accepts clients who cannot afford to pay. Before the pandemic, they set a bold goal: by 2028, every person in the United States should have access to affordable veterinary care.
However, the outbreak of the pandemic brought everything to a halt, causing a sharp decline in donations to the organization. They had to enter crisis management mode. By December 2021, the staff felt exhausted, and the entire veterinary care industry was facing a labor crisis. The organization attempted to motivate its employees with a sense of purpose: they are here to make a profound change in the world, and working here is about more than just earning the highest salary, but the results were meager.
One major challenge was that, as the organization’s leader, Mills, put it: “Without a realistic plan, a team cannot transition from exhaustion to making bold goals.”
So, how can a plan be formulated that is immune to external disruptions and can be sustained? This requires the organization to become agile and ensure that ambitious goals are not interrupted under any circumstances.
Mills decided to use OKRs to facilitate the organization’s transformation. She, along with two other leaders of the organization (including the Chief Financial Officer), learned about OKRs together. She said, “I wanted us to learn how to use OKRs together, rather than imposing them from the top down.” Through their learning, they identified four key areas that the organization needed to focus on, which are the four most important “Os,” and quickly gained consensus with her senior staff and board.
Next, the team narrowed down the focus of their meetings to set a goal for the first quarter in each of these four areas. Then they discussed: What would the key results look like?
Mills said this became challenging. “We’re a very KPI-driven organization. Our teams are struggling with the difference between KPIs and OKRs. How do we distinguish between OKRs and KPIs?” It took them some time to realize that they should not only focus on KPI numbers but measure the organization’s day-to-day operational status through KPI information. Their OKRs should describe the changes they want to make within the organization, not just what they must achieve every day. She believes that creating space to describe and measure a bold future will motivate the team.
One of the challenges in their ambitious goals is fundraising. For every non-profit organization, a certain amount of funds must be raised in a year, but achieving their expectations required raising more funds than ever before. To achieve this ambitious goal, they needed to surpass their past capabilities.
How to do it?
In the past, they set targets from top to bottom based on KPIs, such as setting total fundraising targets for the first quarter and dividing them by channel or region. However, this meant that fundraising staff in Houston would be in competition with those in Philadelphia.
Mills decided not to continue with the old approach. She said, “To succeed, the fundraising team cannot pursue growth in isolation. Perhaps it would be easier to allocate $5 million to each department head, but this would counteract what I am trying to achieve, which is to make all of us—whether in finance or human resources—responsible for this. I believe that OKRs are a way to unite the senior leadership team rather than having each department fight on its own.”
By pursuing the overall goal in this way, they broke free from past thinking and methods. The connections between departments, teams, and various social groups, including teams, clinics, and clients, became closer. Not only did fundraising channels multiply, but the team also came up with many other collaborative fundraising methods. They were confident in achieving their goals.
They also became more focused and less prone to being interrupted by external factors. For example, if the Chief Financial Officer received a resource request that was inconsistent with one of these four goals, it would not be allocated in the budget. Mills said, “This opened a lot of people’s eyes.”
More importantly, through shared goals, transparency, and active feedback communication, the team gained the ability to iterate rapidly and be agile in response to the environment. Goals may be adjusted, but at least after several challenging years, they are still moving toward their ambitious goal: to ensure that every beloved pet in the United States can access the necessary veterinary care at a price their owners can afford.
This case study reflects a common mistake in organizational agile transformation: while improving processes and tools, goals are still simply divided, and performance goals are allocated top-down to respective individuals and teams. This approach can lead to fragmentation and conflicts between teams and does not foster collaboration and win-win situations. The most crucial aspect of agile transformation is goal alignment: making everyone in the team accountable for the goals, rather than assigning them to one person.
Case Study 2: Agile Leadership Empowers Organizational Agile Transformation
Jack is the CEO of a large consumer goods company that has achieved tremendous success over the past decade, proud of its excellent product and service quality, efficient supply chain, and low costs.
However, they are now facing significant competition in almost every area: some competitors have introduced products and services beloved by distributors, others have won customers with lenient return policies, and still others have reduced warehousing costs and inventory levels with shorter cycles.
These challenges have posed a great threat to Jack’s company.
To address these challenges, Jack decided to create an Agile Leadership Team, consisting of the CFO, CHRO, CIO, COO, CMO, and himself.
Jack’s first step was to clarify the need for change. Through a meeting, this team clarified the company’s strategy, reassessed the value of current activities, decided to discontinue some projects, and committed to focusing on a major strategic initiative that could potentially add billions of dollars.
Next, the team broke down this strategy into three parts:
- Focus on improving the product development process.
- Expand distribution channels and enhance the supply chain.
- Change marketing plans.
The Agile Leadership Team set ambitious goals for these three areas and established metrics to track progress.
Then, they identified the current work related to these areas and decided to transform the most innovative activities into 25 Agile teams. Some existing work was reduced, while some was merged and reconfigured. All of this was coordinated using Agile principles and priorities were set using Agile principles.
For example, the product team first prioritized the list of products to be developed and then outlined scenarios for partnering with third-party collaborators.
But most importantly, the executives had to embrace Agile principles.
Jack created an Agile management structure that broke down the company’s existing hierarchy. Twenty-five Agile teams were led by a star Chief Operating Officer and three excellent managers, who helped coordinate resources, guide decisions, and ensure key departments executed the recommendations of the Agile teams.
Jack also led the Agile Leadership Team members in drafting an Agile Manifesto to guide their own behavior. This document would serve as a North Star to help them stay Agile consistently.
In the past, similar “transformation” projects were managed by mediocre people part-time, who had more time but often failed. This time, the leadership team decided to dedicate the company’s most outstanding and admired managers to this work, and they began designing the work with a customer-centric approach.
Jack required the 25 Agile teams to conduct at least one evaluation per month, assessing whether their work aligned with the spirit of the Agile Manifesto.
He encouraged the Chief Information Officer to install software that increased visibility of information throughout the organization, minimizing duplicate work and enhancing collaboration. The Agile Leadership Team could see in real-time what everyone was working on, what their backlogs were, what they planned to complete, and what interdependencies existed between teams.
In this Agile team, because the IT department had the most experience with Agile, the Chief Information Officer assumed the role of a coach for the Agile Leadership Team. The Chief Operating Officer played a coordinating role, responsible for creating the processes required for collaboration between Agile innovation teams and the operations department. The Chief Marketing Officer’s responsibilities expanded from traditional brand and advertising activities to helping business units identify and prioritize strategic opportunities.
Before Agile management, meetings were always disappointing. Most people started with unclear goals, spoke randomly in a random order, reached consensus after hours of discussion, and then didn’t follow through because they would say the market environment had changed, and the previous action plan was no longer practical.
Jack canceled as many meetings as possible, focusing time on collaborative problem-solving meetings. These meetings listed the issues to be addressed and the obstacles to be eliminated, making decisions in hours instead of weeks. Decision-making sped up, everyone understood their responsibilities, and they made greater commitments to their goals. Because of transparent information, everyone could see intuitively what tasks were to be completed, when they were to be completed, and by whom.
Agile allowed executives to delegate many of their activities to their subordinates, so they could focus on things only they could do. Over time, executives realized that spending an hour reviewing or guessing the work of an operations manager created far less incremental value than spending the same time on significant cross-functional innovation—tasks that ordinary employees couldn’t handle.
In the end, the results showed that through a three-year Agile transformation, leaders spent twice as much time on strategy (increasing from 10% to 40%), made over 50% fewer operational decisions (decreasing from 60% to 25%), and slightly increased management talent time (from 30% to 35%).
This case illustrates the importance of leadership in agile transformation. In the past, enterprise transformations were often driven by HR departments or less critical departments because these individuals had more time. However, such efforts were often unsuccessful. Agile transformation requires the involvement of top management and the most exceptional individuals within the organization.