Large corporates are, at best, 30% efficient in delivering change. From launching a loan product to landing a new bakery range on a supermarket shelf, big organisations are failing to deliver change at pace and realise value from it.
One leading credit card provider told us they’d last delivered a major new product eight years ago. ‘We were the leader in the market,’ said the project manager. ‘However, others have caught up and now we’re struggling to respond.’
‘It takes us two years to do what our competitors can do in two months.’ MD – FTSE100 organisation
In such uncertain times, this slow and inefficient pace presents a significant threat to the UK economy – but it also offers a major opportunity. If UK PLC can increase its agility, it will unlock billions of pounds worth of wasted effort and be able to access new revenue streams.
70% OF EFFORT OFTEN GOES TO WASTE
It’s not that organisations aren’t trying to deliver change. Indeed, many firms are spending a lot of energy on it. However, JCURV’s research has found that as much as 70% of the effort (time, investment and resources) is being wasted.
We worked with a FTSE100 bank which took 18 months to launch a credit card. Our analysis identified several key barriers to change which resulted in 14.5 months out of the 18-month process being wasted. See the table below:
IMPLICATIONS FOR THE BANK AND FOR THE ECONOMY
With the product forecast to deliver £5m profit uplift in the first year, the 14.5 month delay equated to £6m in lost profit. That’s a £416k cost of delay for each month the product wasn’t launched! In addition, with a team of 20 working on the product, the wasted salary bill was £1m, as 70% of the time was spent on adding little or no value.
FIGURE 1: BREAK DOWN OF THE 18 MONTH PRODUCT DEVELOPMENT CYCLE
Unfortunately, this is an all-too common scenario, played out in many industries and government organisations – locally and nationally. JCURV estimates that FTSE100 firms alone waste £2.5bn from staff working on low-value change tasks and are missing out on a further £10bn in lost profit opportunities.
REDUCING THE DEVELOPMENT LIFECYCLE TO SIX WEEKS
However, by adopting agile ways of working in the boardroom, and cascading them down through the organisation, the bank was able to cut its production cycle from 18 months to six weeks.
Agile working requires the establishment of cross-functional, full-time, empowered, and co-located teams. Rather than waiting for a big reveal at the end of the project, teams work with end users to test-and-learn each step of the way from idea to deployment. Teams are self-managing, governance is minimal, and the board only steps in if it’s needed to tackle a strategic issue that needs unblocking.
UNLOCKING 70% OF PRODUCTIVITY USING THREE AGILE LEVERS FOR CHANGE
Agile may have started out with tech teams, but our work with FTSE100 firms to adopt the approach, enterprise-wide, has shown impressive results. We’ve identified three key levers which enable them to do this:
- Leaders need to create a clear and safe environment for teams to operate ineffectively.
- Establish agile teams to design, build and deploy solutions efficiently.
- Apply an iterative development approach to create solutions quickly, learn rapidly and reduce deployment risk.
FIGURE 2: THREE LEVERS TO UNLOCK 70% OF PRODUCTIVITY EXPLORE HOW AGILE WORKING CAN HELP YOUR FIRM
Adopting agile ways of working is an absolute must for organisations that want to remain competitive and, more importantly, for UK PLC. Imagine what unlocking 70% of productivity could do for the FTSE100 organisations alone.
‘[By using Agile ways of working] we’re now on our way to changing the direction of our massive oil tanker.’ – Group HR Director FTSE100 organisation
You don’t have to jump straight in. The experimental nature of agile working allows you to test out one or two projects before defining the best approach for your organisation and gradually scaling up. This ensures the new way of working sticks.
It may not be easy, but as one of our FTSE100 clients stated about their transition to agile working: ‘We’re now on our way to changing the direction of our massive oil tanker.’
The Business Transformation Network has posted this article in partnership with JCURV.
