Agile Activity Groups

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Framework Primer
Agile Activity Groups
Presentation created by
Dynamic
Strategy
Development
Market
Environment
Response
Change
Management
Response
Refinement
Sense of Shared
Purpose
Change-friendly
Identity
Robust Strategic
Intent
Sensing
Communication
Interpretation
Slack in Resources
Risk Management
Learning
Management and
Organizational
Autonomy
Embedded Change
Capability
Performance
Management

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Contents
Overview
Agile Methodology
Agility and Performance
Templates
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Agile Activity Groups is a whole system of managing Agile companies
to consistently outpace competitors
Presentation Overview
Strategically relevant, Agile Organizations pursue Change for the sake of Competitive
Advantage.
Big corporation, by nature, maneuver like battleships. Held back by their own inertia and current business
strategies, turning quickly can be difficult when competitive environment changes. Likewise, high performance
as measured by shareholder returns is impossible to sustain over a long period of time. No company
consistently beats the market.
A recent in-depth study of long-term performance however suggests an alternative point of view about business
strategy. A few large companies outperform peers when the measure of performance is profitability. They
maintain this performance edge even during significant business change in their competitive environments.
Agility is one factor that differentiates them from others.
Agile companies adapt business change more quickly and reliably than competitors. Even as battleships, they
have learned to turn quickly as speedboats. Learning the routines of Agility makes them be at the forefront of
competition.
This presentation discusses the 4 Agile Activity Groups that make high-performing organizations distinguish
themselves from others: the underperformers and thrashers.
A few large companies in every industry show consistently superior profitability relative to their peers. They all
have one thing in common: a highly developed capacity to adapt their business to change.
This deck also includes slide templates for you to use in your own business presentations.
1 Dynamic Strategy Development
2 Market Environment Response
3 Response Refinement
4 Change Management

Contents
Overview
Agile Methodology
Templates

Agile Methodologies began in Software, but has since transcended to
other functions with the organization
For more information on building an Agile Organization, refer to this framework:
https://flevy.com/browse/flevypro/agile-organization-2971.
Agile Methodology – Overview
For the past 3 decades, Agile Methodologies have already been transforming Software development. Note that
Software is a particularly difficult area to manage in the Digital Age due to the rapid advances of technologies
and changes in customer demands.
What is Agile?
Agile is a holistic system engineered to overcome
more than a dozen common barriers to successful
project deployment. Under Agile, requirements
and solutions evolve through the collaborative
effort of self-organizing cross-functional teams.
Key principles of Agile include:
Adaptive planning
Evolutionary development
Early delivery
Continuous improvement
Rapid and flexible response to change
In Software development, Agile has increased the
average success rates from 11% to 39%.
Beyond Software, organizations have adapted Agile
methodologies in other parts of the organizations.
These functions include:
R&D
Marketing
Operations
Corporate Strategy
Due to Agile’s systematic and repetable characteristics,
most organizations have been able to replicate the success
in Software development across these other functions.
Source: Agile Innovation, Bain, 2016

Agile takes a systematic approach, which can be summarized in a 6-step
process
An Agile approach brings the most valuable offerings and features to market faster.
Agile Methodology – Approach
The team then brainstorms ways to drive improvement
of future cycles
The systematic approach adapted by Agile follows a 6-step process.
The team tests small working increments with groups
of potential customers
Team members hold daily meetings to review progress
and identify impediments to progress
The team then deconstructs top-priority items into small
modules
The initiative owner continuously ranks the list of features
based on the latest estimates of value to customers,
financial results, and impact on other relevant initiatives
To address the problem, we first form a small, focused,
cross-functional, self-management team
1
2
3
4
5
6
The team’s initiative owner builds a list of promising ideas or features,
by leveraging techniques such as Design Thinking. This person typically
divides his or her time between the Agile team and key stakeholders
A process facilitator protects the tea from distractions and puts its
collective intelligence to work.
The team decides how much work to take on and how to get it done.
They build working versions in short cycles known as sprints. This
process is completely transparent to the organization.
If there are any disagreements, these are resolved via experimental
feedback loops, instead of internal debates or appeals to authority.
If the customer gets excited, the increment may be released immediately,
even if other stakeholders feel it’s not ready for release. The decision
for release is driven at this point by positive customer feedback.
Likewise, the team also prepares to go after the next top priority
in the list.

Agile provides numerous benefits
Agile also increases customer engagement and satisfaction by improving visibility and
likewise adapting quicker to the customers’ changing priorities.
Agile Methodology – Benefits
Agile offers a wide array of benefits, which has led to its increasing popularity. According to studies, over 90%
of IT organizations use Agile methodologies in at least some of their Software development.
76
77
79
84
87
800 40 60 10020
Faster time to market
Reduced project risk
Got better with Agile
Ability to manage changing priorities
Increased team productivity
Increased team morale and motivation
Source: The Standish Group, CHAOS Report 2015; VersionOne, 10th Annual State of Agile Survey, 2015; Scrum Alliance, The 2015 State of Scrum Report

Contents
Overview
Agile Methodology
Templates

Agility and Performance are proven to be strongly intertwined
Agility is a cultivated capability that enables organizations to respond in a timely, effective,
and sustainable way when changing circumstances require it.
Agility and Performance – Overview
Source: The Agility Factor, Strategy&, 2013
A survey of 4,700+ leaders was conducted by global consulting firm PwC to determine the link between
Agility and Performance.
SURVEY
FOCUS
SAMPLE
SIZE
SURVEY FINDINGS
More than 4,700 directors and
executives from 56 companies were
surveyed.
34 of the 56 companies were
Fortune 500 firms.
Executives at 29 of the Fortune 500
firms were interviewed.
To determine the way organizations
formulated strategy, designed their
structures and processes, led their
people, and changed and innovated.
When markets and technologies
changed rapidly and unpredictably, the
outperformers had the capability to
anticipate and respond to events, solve
problems, and implement change.
Strong relationship exists between a
company’s basic approach to
management and its long-term
profitability patterns.
Agile companies can easily adapt.

ExxonMobile and Royal Dutch Shell have consistently posted above-
average return on assets (ROA) since 1980
Despite occasional stumbles, ExxonMobile and Shell have consistently delivered the goods.
Agility and Performance – Oil & Gas Example
ExxonMobile and Royal Dutch Shell are the only two outperformers in the old and gas industry.

Companies that score high in Agility-related routines have higher levels
of Return on Assets (ROA)
Though improving Agility routines can make an organization more effective, agile
companies are found to have more than 3 traits in large supply.
Agility and Performance – Long-term Performance
Firms with only one or two of the Agility routines are more likely to have below-average ROAs.
Less than 50%
51-79%
More than 80%
Number of agility routines with above-average scores
3 or 4
6%
30%
18%
Fewer than 3
27%
15%
3%
Percentage of years
ROA was above
industry average

Contents
Overview
Agile Methodology
Templates

Managing an Agile company involves 4 distinct but complementary
groups of activities
Executing these routines in concert, over and over again, enable outperformers
to consistently outpace competitors.
Agile Activity Groups – Overview
Four routines distinguish the high-performing organizations from the thrashers and underperformers.
Strategize in dynamic
ways.
Accurately perceive
changes in external
environment.
Test possible responses.
Implement changes in
products, technology,
operations, structures,
systems and capabilities,
as a whole.
High-performing
organizations can accomplish
all of the following:
There are 4 Agile Activity Groups that distinguish high-performing organizations.
Each group encompass 3 key activities.
Sense of shared
purpose
Change-friendly
identity
Robust strategic
intent
Sensing
Communication
Interpretation
Slack in
Resources
Risk Management
Learning
Management and
Organizational
Autonomy
Embedded Change
Capability
Performance
Management
Dynamic
Strategy
Development
Market
Environment
Response
Change
Management
Response
Refinement

Dynamic Strategy Development is a strategic direction towards gaining
competitive advantage
Competitive advantage is gained through ongoing series of temporary advantages that
exploit current business conditions.
Agile Activity Groups – Dynamic Strategy Development
A $16 billion consumer finance powerhouse.
Strategized the 3 elements dynamically.
̶ A widely shared and well-understood sense of
purpose properly codified in its mission statement
and business model.
̶ Test and learn as the company’s change friendly
identity.
̶ Strategic intent embraces continuous change.
̶ Rapid shift in operation to adjust the aggressiveness
of marketing, customer support, new product
development, or R & D and modification of product
features.
COMPANY Capital One Financial Corporation
CASE STUDYDESCRIPTION
Clear, relevant, and shared strategy
undertaken with 3 key activities integrated
within the strategy.
AGILE ACTIVITY GROUP
Dynamic Strategy
Development
KEY ACTIVITIES
Value-driven purpose
and business model
shared to drive
behavior.
Sense of Shared
Purpose
1
Clear sense of
company’s identity and
direction stable enough
to ground the
organization.
Change-friendly
Identity
2
Current business
strategy and intent that
clarifies how the
company differentiates
itself.
Robust Strategic
Intent
3

Market Environment Response ensure effective response to implications
of outside signals
The external focus of Agile companies enables companies to face up to brutal facts and
separate wheat from chaff.
Agile Activity Groups – Market Environment Response
A Fortune 500 kidney care organization.
With effective institutionalized perceiving routine.
̶ Focus on understanding the local marketplace and
broader environment.
̶ Concentrated on delivering future value.
̶ All information funneled to top management for
consideration.
̶ Different management teams accountable for
different purposes.
COMPANY Da Vita HealthCare Partners Inc.
Accurate sense of what is going on in the
environment.
Market Environment
Response
KEY ACTIVITIES
In-depth exploration of
the future.
Maintain continuous
connection with varied
sectors in the business
environment.
Sensing
1
Regular flow of
communication
between bottom and
top for effective
decision making.
Communication
2
Information evaluated
based on company’s
identity, intent,
business model, and
risk tolerance.
Interpretation
3

Response Refinement encourages innovation and tolerates failure
Agile organizations are not always and everywhere lean and mean – they must consciously
build in extra organizational slack.
Agile Activity Groups – Response Refinement
Apparel retail chain in keeping with fashion trends and
competition.
Formal and informal routines in place.
̶ Maintain a ‘what’s new what’s next mantra to keep
the company on their toes.
̶ Small-testing procedure in place to try new concepts
and product extensions.
̶ Consumer responses to small-scale test are vetted
followed by investment decisions.
COMPANY Limited Brands
Insights refined from the perceiving routine
with relatively high number of low-cost
experiments.
Response Refinement
KEY ACTIVITIES
Availability of capable
resources for new
ideas testing and
experimentation.
Slack in Resources
1
Risk assessment
criteria to measure
success level with
failure as an accepted
possibility.
Risk Management
2
Continuous
improvement through
constant learning
exercises and
experience.
Learning
3

Change Management builds company’s capability to adopt unambiguous
commitment with speed, certainty, and precision
Agile organizations have change capability embedded in line and staff organizations.
Agile Activity Groups – Change Management
Built on the principle of radical decentralization.
̶ Guided by a change-friendly identity and slogan.
̶ Branch Managers accountable for results and
continuous improvement.
̶ Half of branch’s staff has lending authority, permitting
customers to receive answers quickly.
̶ Decentralized approach supported through coaching.
̶ Implementation of change relies on managerial
autonomy and shared leadership.
̶ Strong-form performance management system
provides incentives for follow through.
COMPANY
Swenska Handelsbanken,
a Swedish bank
Mastery of internal program management
capabilities needed to convert successful test
and innovations into widespread practice.
Change Management
KEY ACTIVITIES
Delegation of authority
to line and business
managers to execute
changes with success.
Management and
Organizational
Autonomy
1
Pragmatic ability to
change collective
habits, practices, and
perspectives in line
operations.
Embedded Change
Capability
2
Clearly accepted
performance
measurements and
targets based on
business model
drivers.
Performance
Management
3

Contents
Overview
Agile Methodology
Templates

Insert headline
Insert bumper.
Agile Activity Groups – TEMPLATE
Dynamic
Strategy
Development
Market
Environment
Response
Change
Management
Response
Refinement
Sense of Shared Purpose
Change-friendly Identity
Robust Strategic Intent
Sensing
Communication
Interpretation
Slack in Resources
Risk Management
Learning
Management and
Organizational Autonomy
Embedded Change
Capability
Performance Management

Insert headline
Insert bumper.
Agile Activity Groups – TEMPLATE ALTERNATE
Dynamic
Strategy
Development
Market
Environment
Response
Change
Management
Response
Refinement
1 2
4 3
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filler text.
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Insert headline
Insert bumper.
Agile Activity Groups – TEMPLATE ALTERNATE
Dynamic Strategy Development
Sense of shared purpose
Change-friendly identity
Robust strategic intent
Market Environment Response
Sensing
Communication
Interpretation
Change Management
Management and
Organizational Autonomy
Embedded Change Capability
Performance Management
Response Refinement
Slack in Resources
Risk Management
Learning

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for premium documents. These
documents can range from Business
Frameworks to Financial Models to
PowerPoint Templates.
Flevy was founded under the principle that
companies waste a lot of time and money
recreating the same foundational business
documents. Our vision is for Flevy to
become a comprehensive knowledge base
of business documents. All organizations,
from startups to large enterprises, can use
Flevy— whether it's to jumpstart projects, to
find reference or comparison materials, or
just to learn.
Contact Us
Please contact us with any questions you may have
about our company.
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