What is agile transformation? A short & crisp definition

So you’ve probably heard of agile transformation, but now you are not sure where (and if) to start because you don’t know what agile transformation actually is?

Well, we have got you sorted!

In a nutshell: What is agile transformation

Let us begin our explanation with an example: A restaurant chain named Burger Queen (that was creative!). Let us imagine Burger Queen wants to start 20 new restaurants in California.

That’s what Burger Queen calculated in advance in their (waterfall) plan as a sensible market entry - as most other companies do: They have a clear long-term plan.

Within the first few weeks of the actual market entry, however, Burger Queen realizes that 6 of the 20 restaurants are performing quite poorly - probably because of their poor location (Cologne, for example, is doing better than Düsseldorf ;). From a financial point of view, it is already clear that these 6 restaurants have no long-term justification. Damn, that was wasted money!

The agile mindset

Now let’s change this approach to an iterative, agile approach. Burger Queen takes this agile mindset :

“Ok, we don’t know which locations are the best to open our next 20 restaurants. We don’t even know if people like our burgers! There are so many uncertain variables and hypotheses on which our plan is based.

So let’s be agile, let’s think customer-centric and test it on the market - by renting 20 food trucks for a month and placing them where we would normally open our restaurants!”

This way, after three weeks already and with lower risk (and less money spent) they will know that 6 of the planned locations will not really work - not speaking of all the other learnings from their experiment that they can use to make their business plan more precise.

Agile Transformation Definition - the theory

What we have seen in our example is an agile approach to organizing a business.

In short, an agile transformation is the transformation of a company from their currrent (often waterfall) management method to iterative or agile ways of working.

Specifically, it is utilising a methodology of agile principles and frameworks for change and impact - for example like Scrum That means away from a) more detailed long-term plans (waterfall) to quasi b) an organization in small steps. In Scrum, these steps are called “Sprints” - i.e. a plan only for the next few weeks.

After an agile transformation, teams and the entire organization can - in the best case - work more successfully by introducing new processes and organizational structures. Experience has shown that the transition to agile methods is particularly worthwhile in contexts in which environmental variables (such as customer requirements or technologies) are changing quickly.

The advantages of agile ways of working: You are more adaptable to a world in which new technologies or pandemics constantly refute the hypotheses on which our plans are based.

Agile transformation is often associated with a cultural change in which teams (or “trains” or “tribes”, so merging many teams) are formed that work together as a unit in iterative cycles (e.g. three months).

Depending on the framework (whether Large Scale Scrum LeSS, Scaled Agile Framework SAFe®, Scrum@Scale or NEXUS) there are different names for this - you can find more about this in our introduction to the Scaled Agile Framework SAFe®.

Managing changes at the team level in these scenarios can of course be a big challenge. You can find specific tips on how to develop teams and organizations in our free eBook “ Teamflow & Mindset Change .

Agile transformation is about putting people and their mutual interaction first - and not tools and processes. This is also part of the Manifesto for Agile Software Development. 

In agile work, the process and not the output is important. The customer should always be involved in the development process instead of just presenting the output at the end (you cannot find that in systems that are organized through Waterfall is not included). 

When the customer comes first, the customer will last.

– Robert Half

For our example this would mean: Burger Queen regularly offers its customers the chance to test new burgers free of charge. In this way, they draw their customers’ attention to the new products - and at the same time can learn what customers really want.

An important part for the successful implementation of the agile transformation is to respond to changesinstead of following a plan.

This perfectly fits the example of Burger Queen’s new way of working. If Covid would hit Burger Queen, using their trucks they would be able to experiment flexibly and learn faster. 

They could see if their locations were on point. Burger Queen reacted to change and regathered data to better their business around their customer needs.

What is the waterfall to agile transformation?

We have already reported on the difference between waterfall and agile methods - you can check it out here .

“The two most important development methods are waterfall and agile”

– Source: Trust radius

To briefly repeat the difference, firstly, the waterfall method is a traditional and linear approach where phases run in a particular order and cannot be abandoned.

Here, too, the example of Burger Queen fits well - when you consider how they originally planned to carry out their market entry: They had a one-year plan. They would open the 20 new restaurants, order exactly 1000 salads per month, and so on. And after 6 months, they would reach the next phase - opening 30 more restaurants… That’s waterfall.

One thing that is important to understand: waterfall is not always bad. It is perfect if you can be sure that circumstances will not change.

How and when to start your agile transformation?

All in all, the transformation from waterfall to “Agile” can take up to two years - because, as already mentioned, it involves the introduction of a completely new culture. 

The occurrence of agile transformation from waterfall would include some of the valid additions:

• the presence of experienced agile experts,
• formal training in agile,
• communicating effectively
• strong executive management or a well-prepared management team, respectively.

By the way, you can find seven tips on what the management team must do for a successful agile transformation here.

Waterfall to agile transition (vs. transformation) - definition

Some people do not say agile transformation, but they call it agile transition - what is the difference here?

According to Method Park and VitalityChicago an agile transition is the introduction of agile methods, while an agile transformation is the complete change of mindset that encompasses a larger part of the company - a cultural change. 

In other words, the transition into new methodologies is a small part of the larger transformation. If only two out of 100 teams switch to agile ways of working, one would probably only speak of an agile transition.

At the same time, from our experience, the majority of people use these two phrases (“waterfall to agile transition” vs. “waterfall to agile transformation”) interchangeably.

Conclusion: what is agile transformation (definition)

It has become clear that agile transformation involves many stages. However, one thing is certainly central: customer centricity. Customers are at the heart of agile working, because the core reason for an agile transformation is to deliver value faster - for your customers.

In our example of Burger Queen, the customer feedback was key. If they had not gone out with the trucks then they wouldn’t have known where their customers were gathering mostly.

By the way, to finish our example: Burger Queen was able to develop quite well - after their agile transformation - and is now characterized by strong growth. 😉