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Thriving in the Digital Age
One of the most influential books for SAFe® 5.x and SAFe® 6.0 is Project to Product: How to Survive and Thrive in the Age of Digital Disruption with the Flow Framework by Mik Kersten.
The following quote from his book could not be more appropriate following the Covid-19 Pandemic:
So, welcome to the age of software and digital—an interconnected, real-time world in which every industry is dependent on technology and every organization (at least in part) is a software company. To remain competitive, enterprises need to transform their operations, business solutions, and customer experience into a digital interface. The larger challenge in many enterprises is that their current business models, organizational hierarchies, and technology infrastructures can’t keep pace with the rapid change required.
In this chapter, we will consider the following key topics:
- The Technological Revolutions that have changed society
- Some of the casualties of the Digital Age
- The Dual Operating system for Business Agility
- The seven Core Competencies of Business Agility
- Lean, Agile, and SAFe® Values and the 10 SAFe® Lean-Agile Principles
The Five Technological Revolutions
In Technological Revolutions and Financial Capital, [1] Carlota Perez plots the evolution of societal, industrial, and economic capital based on Technological Revolutions that occurred over the last few hundred years. She opines that these disruptive trends happen every generation or so.
It started with the Industrial Revolution in the 1770s, followed by the Age of Steam and Railways in the early 19th Century, then the Age of Steel and Heavy Engineering in the late 19th Century bringing us to the Age of Oil and Mass Production in the 20th Century. We conclude with the current Age of Software and Digital into the 21st Century (see Figure 1.1):
Figure 1.1 – The five Technological Revolutions, adapted from Technological Revolutions and Financial Capital by Carlota Perez (© Scaled Agile Inc.)
Each revolution has a regular sequence of three distinct phases:
- Installation Period: New technology and financial capital combine to create a “Cambrian explosion” (a geological term for a relatively short time over which a large diversity of life forms appeared) of new entrants
- Turning Point: Existing businesses either master the new technology or decline and become relics of the last age
- Deployment Period: The production capital of the new technological giants starts to take over
Carlota also explains that she has observed from history that during the Installation Period, while there is an influx of financial capital to support the new entrants, this is followed by some form of “crash” or multiple crashes.
If we consider the Age of Oil and Mass Production, we had the Roaring Twenties, but in 1929, we had the Wall Street Crash, which affected markets around the world. We then encountered the longest Turning Point in history, which is often when we see a period of political uncertainty, and in the 1930s, we saw the rise of fascism in Europe through to the conclusion of the Second World War in 1945. Those that survived took advantage of the biggest boom in history, with the likes of Toyota coming to the fore in car manufacturing.
If we turn to the Age of Software and Digital, we had the Dotcom crash that peaked in 2000 and the global financial crash in 2008. Carlota was on stage in Paris in 2019, presenting at Sogeti’s Utopia for Beginners’ Summit about our Digital Future [2], and she said:
Bearing in mind this was in 2019, and then in March 2020, we had the unprecedented Covid-19 Pandemic. It was as if Perez predicted this months earlier.
Pro tip
Watch the video of Carlota Perez on stage in Paris in 2019 because it will help with a great narrative if you are teaching lesson one in Leading SAFe®. You will find the link in the Further reading section [2].
Post Covid-19 Pandemic, it is clear that we are now firmly in the Deployment Phase of the Age of Software and Digital.
We often get asked, “What is the next Technology Revolution?” We are neither Futurists, nor Clairvoyants. That said, we know that the rise of new technologies comes with the decline of the previous technology. We then have a period of bubble prosperity with financial capital supporting the new entrants.
If we follow the current financial capital, then we will see investment in Artificial Intelligence (AI), Big Data, and the Cloud.
Research by PWC found 72% of executives believe that AI will be the most significant business advantage of the future.
The company Snowflake, which provides data warehouse-as-a-service, was the biggest software Intellectual Property Office (IPO) in 2021 and implied five-year sales growth of 819%. In the cloud, there are three or four major providers, and the worldwide end-user spending on public Cloud services was forecast to grow to $332.3 billion in 2021.
The future is ABC – AI, Big Data, and the Cloud, which is reflected in SAFe® 6.0, where all three elements are represented in the Big Picture.
Caution
In a survey, only 9% of respondents strongly agree that their companies have Leaders with the skills needed to thrive in digital workplaces. Therefore, if we are going to survive the next Technological Revolution, we need to upskill our Leaders, fast!
Casualties of the Digital Age
There is no doubt that we are in the deployment stage of the Age of Software and Digital following the devastating effect of Covid-19 not only on businesses but also on people’s lives and loved ones.
Part of your narrative when teaching SAFe®, running a workshop, or talking to Leaders is to remind them of some of those business casualties. The examples provided are UK based, but you will need examples that reflect your region and even industry.
Primark, a European fashion retail store, was forced to close all 375 stores 12 days after the initial Covid-19 lockdown in March 2020. They did not reopen for six months and reportedly lost £800m in revenue because they could not sell online. Two years later (yes, two years), in October 2022, Primark announced a trial of a click-and-collect service across just 25 stores. While Primark has survived, they still do not have full e-commerce capability.
The same cannot be said for Sir Philip Green, an analog man in a digital world, who saw his retail empire turn to rags (no pun intended).
The statement “no one will buy fashion online” has been attributed to various people over the years, but it is difficult to pinpoint a single source, although reportedly Sir Philip Green did say it regarding ASOS – a British online fashion and cosmetic retailer.
In the early days of e-commerce, many people were skeptical about the idea of buying fashion items online, as they felt that consumers would want to try on clothes and see them in person before making a purchase. However, as online shopping has become more common and technology has improved, many people have changed their tune.
Sir Philip Green’s Arcadia Group went into administration (a precursor to try and avoid Bankruptcy) on November 30, 2020, an early casualty of Covid-19. The irony is that early in the following year, ASOS was in “exclusive” talks to buy Arcadia’s Topshop, Topman, Miss Selfridge, and HIIT brands out of administration, though it only wanted the brands, not the shops.
And in February 2021, ASOS bought the Topshop and Miss Selfridge brands for £330m.
Arcadia was not the only retail casualty, on December 1, 2020, Debenhams announced it was going into liquidation. On January 13, 2021, it announced the closure of six stores in England due to the Covid-19 Pandemic. On January 25, 2021, Boohoo acquired Debenhams for a reported £55m after Debenhams announced it would shut its remaining stores by May 15, 2021, closing the door on more than 200 years of trade on UK high streets having been founded in 1778. At its height, Debenhams was the largest department store chain in the UK and even, for a large part of the 20th Century, owned by Harvey Nichols of Knightsbridge.
Announcing the final closures, Debenhams said in a statement:
In April 2021, Boohoo relaunched its website as Debenhams.com.
Pro tip
There are many examples of business casualties that did not survive the Turning Point of the Age of Software and Digital; always try and make your examples relevant to your audience and context.
The Dual Operating System
Over the years, we have had the opportunity to work with a number of founders of start-up companies or those Leaders that started a new business unit. Surprisingly, we have a very similar conversation with them, and it often goes something like this:
Founder: “I really loved it when we were a small start-up company. I had a small team around me, I knew everything that was going on, I was able to direct them all in the right direction, and conversations and collaboration were really easy. But then we became successful, and we grew the organization to the point that we had to introduce a hierarchy. And while I recognized that we need to be more ‘corporate’ and we needed this hierarchy for stability and, to some extent, efficiency, I now find that this hierarchy just gets in the way. It is now more difficult to get things done because I feel that I have to navigate the hierarchy and the functions within the hierarchy to achieve anything. So, can we get rid of the hierarchy, and I can go back to run my small team?”
Our response is always the same – “NO!” At this stage, we take comfort in the words of Dr. John Kotter and from his book Accelerate [3]:
We have been doing this for years. We have a functional hierarchy and from that hierarchy, we create project teams. By their very nature, project teams are temporary organizations with people “loaned” from the hierarchy.
In Chapter 2, we will discuss in more detail about team formation. But for now, let’s accept that as we form a team, they go through Tuckman’s five stages of development – Forming, Storming, Norming, Performing, and then Adjourning. At the point that the team is high-performing, the project is now completed, and then we crash and burn the team, returning them to the hierarchy to wait for an assignment to another project team. The fifth stage is known as “Adjourning” or sometimes called “Mourning” because the project team member really liked working with that project team, and it is a form of “grieving” that they left a really great team and potentially now have to work with another team that they are not relishing.
So, rather than creating temporary teams around project, we want to create long-lived teams around products. These are long-lived, stable, persistent teams that cannot be static because people move on, and the nature of the product will change over its lifespan from a skills and funding perspective. And when we say product, it could be a product, a service, or even a system that we often call collectively a solution.
The concept is not widely different from a project; the difference is that we create long-lived teams from the hierarchy that are aligned around a product rather than a project. We call this complex adaptive network a Value Stream, and SAFe® is the operating system for this Value Stream network (see Figure 1.2):
Figure 1.2 – SAFe® as the second organizational operating system (© Scaled Agile Inc.)
The ability to respond quickly with innovative business solutions—what we call Business Agility—is the deciding factor between success and failure. Therefore, enabling Business Agility is a mission-critical goal for every organizational leader.
Achieving Business Agility requires this dual operating system and a significant degree of expertise across SAFe’s seven Core Competencies. So, let’s have a look at these Core Competencies next.
Core Competencies of Business Agility
First, let’s accept that every business is a software business – even BMW no longer regards itself as a car manufacturer but rather software on wheels. In a premium car, there are now over 100 million lines of code; in an autonomous car, over 1 billion lines of code.
So achieving a state of Business Agility requires the entire organization and everyone involved in delivering business solutions to use Lean and Agile practices.
Historically, Lean and Agile have just been applied to IT teams, and while Business Agility requires Technical Agility, it also needs a business-level commitment to product and Value Stream thinking.
There is no point in having super-efficient IT teams if it takes the team four months to procure a new piece of kit that is required for their product. There is no point in having super-efficient IT teams if it takes the team six months to replace a team member that has left and is part of their agreed headcount.
Business Agility requires not just development and operations but also Finance, People, Sales and Marketing, and Legal to all come together to use Lean and Agile practices. To achieve Business Agility, the organization requires a significant degree of expertise across seven Core Competencies. While each competency can deliver value independently, they are also interdependent in that true Business Agility can be present only when the enterprise achieves a meaningful state of mastery of all competencies.
The seven Core Competencies are as follows (see Figure 1.3):
- Team and Technical Agility (TTA)
- Agile Product Delivery (APD)
- Enterprise Solution Delivery (ESD)
- Lean-Portfolio Management (LPM)
- Organizational Agility (OA)
- Continuous Learning Culture (CLC)
- Lean-Agile Leadership (LAL)
Figure 1.3 – SAFe® Core Competencies (© Scaled Agile Inc.)
Each core competency has three dimensions. We will briefly describe each Core Competency and its associated three dimensions:
Team and Technical Agility (TTA)
Team and Technical Agility focuses on the technical aspects of the solution within the context of a high-performing Agile Team. It emphasizes the need for the teams to have a strong technical foundation and the ability to deliver high-quality, reliable solutions for their customers:
- Agile Teams: An Agile Team is the collective capabilities, skills, and behaviors of the cross-functional teams that are responsible for executing the work and delivering value within an Agile organization. Agile Teams are at the heart of SAFe® and play a crucial role in driving the success of Agile implementations.
- Team of Agile Teams: Agile Teams operate in the context of a SAFe® Agile Release Train (ART). It is a long-lived, self-organizing team of Agile Teams that work together to define, build, and deliver value in the form of solutions. The ART aligns the efforts of multiple Agile Teams towards a common mission and is the primary value delivery mechanism in SAFe®.
- Built-in Quality: All Agile Teams have the necessary technical practices in place to produce solutions that are reliable, maintainable, and scalable.
Agile Product Delivery (APD)
Agile Product Delivery focuses on the practices and techniques needed to continuously deliver valuable, high-quality solutions. APD ensures that teams can quickly and reliably release products and services in increments to customers and gather feedback for iterative improvement:
- Customer Centricity and Design Thinking: Emphasizes the importance of understanding customer needs, delivering value, and leveraging design thinking principles to create customer-centric solutions.
- Develop on Cadence, Release on Demand: Focuses on achieving a balance between predictable, timeboxed development cycles (cadence) and the flexibility to release software solutions when needed (on-demand). This competency helps organizations establish a rhythm for development while enabling frequent and timely delivery of value to customers.
- DevOps and the Continuous Delivery Pipeline: Emphasizes the integration of development (Dev) and Operations (Ops) practices to enable faster and more frequent releases. It includes continuous exploration, continuous integration, and continuous delivery. DevOps and Continuous Delivery Pipeline allow the deployment of solutions into production quickly and reliably, reducing time-to-market and improving feedback loops.
Enterprise Solution Delivery (ESD)
Enterprise Solution Delivery focuses on the ability to deliver large and complex solutions in a coordinated and efficient manner. This competency enables organizations to align their efforts, teams, and resources to deliver value at the enterprise level:
- Lean Systems Engineering: Focuses on applying Lean principles to system engineering activities to optimize the development process and deliver high-quality systems.
- Coordinating Trains and Suppliers: Focuses on establishing effective collaboration and coordination between ARTs and external suppliers or vendors. This competency helps organizations optimize the flow of value across the Value Stream by integrating and aligning the activities of multiple ARTs, including those from external suppliers.
- Continually Evolve Live Systems: Emphasizes the importance of ongoing improvement and adaptation of live systems to meet evolving customer needs and business objectives. This competency focuses on the continuous delivery of value by continuously enhancing and supporting systems throughout their life cycle.
Lean Portfolio Management (LPM)
Lean Portfolio Management focuses on aligning strategy, execution, and investment decisions to optimize the flow of value across the portfolio of initiatives and ensure Business Agility:
- Strategy and Investment Funding: Focuses on aligning strategic objectives with investment decisions to maximize value creation. This competency ensures that the organization’s investment decisions are driven by a clear understanding of business goals and objectives.
- Lean Governance: Focuses on establishing a lightweight and effective governance framework that enables agility and accountability while ensuring compliance and risk management. It emphasizes the need for governance practices that support the Lean-Agile principles and values.
- Agile Portfolio Operations: Focuses on optimizing the flow of value across the portfolio of initiatives and ensuring effective execution and delivery. It involves aligning and coordinating the activities of ARTs and providing operational support to drive Continuous Improvement.
Organizational Agility (OA)
Organizational Agility focuses on developing the capability to rapidly adapt, learn, and respond to changing market conditions, customer needs, and emerging opportunities. It encompasses the ability to embrace change, foster innovation, and continuously improve the organization’s practices and processes:
- Lean-Thinking People and Agile Teams: Focuses on developing individuals and teams with a Lean mindset and Agile capabilities. This competency aims to empower people to think Lean, embrace Agile values, and work collaboratively to deliver value effectively.
- Lean Business Operations: Emphasizes the application of Lean principles in various aspects of business operations to drive efficiency, quality, and value delivery to support the business’s products and services.
- Strategy Agility: Focuses on the organization’s ability to sense and respond to changing market conditions, customer needs, and emerging opportunities. It involves aligning strategy with execution, fostering innovation, and continuously adapting the strategic direction of the organization.
Continuous Learning Culture (CLC)
Continuous Learning Culture focuses on fostering a culture of learning, collaboration, and improvement at all levels of the organization. It recognizes that a learning organization is better equipped to adapt to change, innovate, and deliver value effectively:
- Learning Organization: Focuses on creating an environment where continuous learning, improvement, and innovation are valued and encouraged at all levels of the organization. It aims to foster a culture of learning and adaptability, enabling the organization to respond effectively to change and drive sustainable growth.
- Innovation Culture: Focuses on fostering an environment that encourages and supports innovation throughout the organization. It recognizes the importance of innovation in driving growth, competitive advantage, and the ability to respond to changing market dynamics.
- Relentless Improvement: Emphasizes the continuous pursuit of improvement in all aspects of the organization’s operations. It encourages a culture of ongoing reflection, learning, and enhancement to drive increased efficiency, quality, and value delivery.
Lean-Agile Leadership (LAL)
Lean-Agile Leadership focuses on developing Leaders who can effectively guide and support the organization’s Agile transformation. It involves adopting a leadership style that promotes the principles of Lean-Agile development and supports the success of Agile Teams and initiatives:
- Mindset and Principles: Focuses on adopting the Agile mindset and embracing the guiding principles that underpin the framework. This competency emphasizes the importance of mindset and values in driving successful Agile transformations and achieving Business Agility.
- Leading by Example: Focuses on the role of Leaders in modeling and embodying the desired behaviors, values, and practices of an Agile organization. It recognizes that leadership plays a critical role in shaping the culture, mindset, and behavior of teams and individuals.
- Leading Change: Focuses on equipping Leaders with the knowledge and skills to effectively lead and navigate organizational change during the Agile transformation. It recognizes that change is inherent in adopting new ways of working and that effective leadership is crucial for successful change management.
Pro tip
If you are teaching Leading SAFe®, only provide a brief overview of the seven Core Competencies because the competencies are covered in more detail in the various lessons that follow the opening lesson.
We will explore these competencies in more detail in the following chapters, in particular, Part 1, Team and Technical Agility, Part 2, Agile Product Delivery, Part 3, Lean Portfolio Management, and Chapter 16, Lean-Agile Leadership.
Caution
If you are teaching Leading SAFe®, only three of the seven Core Competencies are covered - Lean-Agile Leadership (LAL), Team and Technical Agility (TTA), and Agile Product Delivery (APD), plus part of Lean Portfolio Management (LPM). As a consequence, you need to remind your learners that they will only be examined on these competencies.
However, you should encourage your learners to explore the other competencies in the framework.
Values and Principles
SAFe® is a knowledge base of proven, integrated principles, practices, and competencies for achieving Business Agility by implementing Lean, Agile, DevOps, System Thinking, and Design Thinking at Scale.
SAFe’s® roots are underpinned by Lean Product Development and Agile Development, so we should really have a brief reminder of these principles.
Lean
In SAFe® 6.0, the SAFe® House of Lean was deprecated in favor of adopting Lean Thinking [5] from the book of the same name and is a combination of beliefs, assumptions, attitudes, and actions and is summarised by five principles. To help you explain them if you are teaching a SAFe® course, we have provided a brief summary of each:
- Precisely specific value by product: Focus on delivering value to the customer by understanding their needs and preferences and creating products and services that meet or exceed their expectations.
- Identify Value Stream for each Product: Identify the Value Stream, which is the entire process of delivering a product or service, and eliminate any steps that do not add value or that create waste.
- Make value flow without interruptions: Ensure that the Value Stream flows smoothly, without interruptions, delays, or bottlenecks, by reducing variability, improving communication, and synchronizing activities.
- Let the customer pull value from the producer: Create a pull system where products and services are produced based on customer demand rather than pushing them into the market or storing them in inventory.
- Pursue perfection: Strive for Continuous Improvement by relentlessly pursuing perfection in all aspects of the Value Stream, using feedback, data analysis, and experimentation to identify and eliminate waste and inefficiencies.
Pro tip
Pursue perfection feels slightly incongruous with Agile thinking when we talk about “good enough,” especially when we want fast feedback. I try to remind the class that I would consider this principle as Relentless Improvement.
Agile
The other significant historical body of work is the Agile Manifesto [6], when 17 thought Leaders from the software industry got together in February 2001 at The Lodge at Snowbird ski resort in the Wasatch Mountains of Utah.
They wanted to try to find common ground, and what emerged was the Agile Software Development Manifesto with representatives from Extreme Programming, Scrum Dynamic System Development Method (DSDM), Adaptive Software Development, Crystal, Feature-Driven Development, Pragmatic Programming, and others sympathetic to the need for an alternative to documentation driven, heavyweight software development processes convened. The values of Agile can be seen in Figure 1.4:
Figure 1.4 – Manifesto for Agile Software Development
Caution
Even experienced software developers will misread the manifesto by replacing “over” with “instead.” For example, “Working software INSTEAD of comprehensive documentation.”
You will often hear, “We don’t do documentation or planning because we are ‘agile.’” Well, that is clearly not the case. People never read the last sentence at the bottom of the values:
“That is, while there is value in the items on the right, we value the items on the left more.”
If you have ever worked in the medical industry, then you will know that the Food and Drug Administration (FDA) will not approve your device unless you have the documentation to support it. They won’t care that you did it in an Agile way!
I would also contend that we do more planning in Agile than in any other software process; in Scrum, we plan every iteration, and you could argue every day at the Team Sync.
SAFe® Core Values
SAFe® has four Core Values [7]. These tenets are so fundamental to the practice of SAFe® that without them, the practices in the framework will inevitably fail to deliver the intended business results that prompted the decision to “go SAFe®.” These core values are briefly described here:
- Alignment: This value emphasizes aligning all teams and Stakeholders around a common goal and vision. It involves developing a shared understanding of objectives, priorities, and dependencies across the organization.
- Transparency: This value emphasizes the importance of transparency and visibility at all levels of the organization. It involves creating an environment where everyone has access to the same information and can work collaboratively towards common goals.
- Respect for people: This value emphasizes the importance of treating people with dignity, trust, and compassion. This principle recognizes that people are the most valuable asset in any organization and that their creativity, expertise, and engagement are essential to achieving organizational goals.
- Relentless improvement: This value emphasizes the importance of continuously striving to improve all aspects of the organization, from processes and systems to products and services. The value of Relentless Improvement lies in its ability to drive innovation, increase efficiency, and enhance customer satisfaction while reducing waste, errors, and inefficiencies.
These represent the foundational beliefs that are key to SAFe’s® effectiveness. These tenets help guide the behaviors and actions of everyone participating in a SAFe® Portfolio. Those in positions of authority can help the rest of the organization embrace these ideals by exemplifying these values in their words and actions.
Pro tip
When describing these values, try and relate with a story of a leader that you know demonstrated these values.
SAFe® Lean-Agile Principles
Like the Agile Manifesto, the SAFe® Principles have not changed much over the years; however, more recently, there have been a couple of evolutions; originally, there were 9 Principles, then a 10th was added in version 5, and in version 6.0 Principle 6 was changed to “Make value flow without interruptions.” The full 10 Principles are shown in Figure 1.5:
Figure 1.5 – SAFe® Lean-Agile Principles (© Scaled Agile Inc.)
We do not intend to go through all the 10 Principles in this book but instead, refer you to an article on the SAFe® Framework [8]. However, it is vital that as a Coach, you fully understand these Principles because, as Deming puts it so eloquently:
One of our very experienced Coaches, when a new Release Train Engineer (RTE) asks her a question about a particular challenge, will always answer, “What do the Principles advise us to do?” And that should always be our go-to source for any problem or challenge that we are going to solve.
Pro tip
The lesson on Lean-Agile Leadership (LAL), which contains all the values and, in particular, the 10 SAFe® Principles, is a long lesson and can be very theoretical. Therefore, it is important that as a trainer, you need to bring color to the Principles.
I have a hypothesis that in our personal lives, we apply these Principles all the time without thinking, but when we step inside our corporate walls, suddenly, these Principles feel completely alien. This is in no small measure attributable to the legacy policies and the view “this is how we do things around here” and have done for the last 20, 30 years. We certainly need to remediate these legacy policies for the digital world.
So, when I teach the SAFe® Principles, I bring color to the lesson by relating them to some of my personal experiences so that the learners can consider how they could match a similar mindset with their organization.
Summary
We have covered a lot of ground in this opening chapter, from the five Technological Revolutions to some of the casualties of the current Age of Software and Digital. We also considered the Dual Operating Model for Business and the Core Competencies that enable Business Agility. Finally, we considered some of the roots of SAFe®, including Lean Thinking, the Agile Manifesto, and then SAFe®’s own Core Values and Principles.
Now that we have established the foundation, we are now in better shape to explore teams in more detail in Part 1, the ART in Part 2, and finally, the Portfolio in Part 3.
But first, time to get a coffee.
Further reading
- Carlota Perez (2003). Technological Revolutions and Financial Capital. Edward Elgar Publishing Ltd.
- Sogeti “Utopia for Beginners” Summit Paris 2019: https://www.youtube.com/watch?v=GrFoaqDrgEU
- Kotter, John P. (2014). Accelerate: Building Strategic Agility for a Faster-Moving World. Harvard Business Review Press.
- Business Agility: https://scaledagileframework.com/business-agility
- James P. Womack and Daniel T. Jones (2013). Lean Thinking: Banish Waste And Create Wealth In Your Corporation. Simon & Schuster UK.
- Agile Manifesto: http://agilemanifesto.org/
- SAFe® Core Values: https://scaledagileframework.com/safe-core-values/
- SAFe® Lean-Agile Principles: https://scaledagileframework.com/safe-lean-agile-principles/
- Deming, W. Edwards (2000). Out of the Crisis. MIT Press.