Five Ways Agile in Automotive Will Pivot in 2020

Last year is in the books, and several of our 2019 Agile predictions came true, such as the increasing focus on business agility and the return of Kanban. But the world doesn’t stand still, so it’s time to predict what will pivot in 2020 as we begin the decade in agile fashion.

Below we composed a list of topics we consider as emerging Agile trends in automotive this year.

1. Dysfunctional to Functional Safety Agility

As of today, most significant automotive players have attempted to implement agility and have recognized it is a good strategy for dealing with increasing complexity. For this reason, massive investments in respective change programs have been made in recent years, so agility is on its way to become a matter of course.

Apart from the difficulties in transitioning from “doing Agile” to “being Agile,” challenges remain in terms of agility in combination with automotive standards related to functional safety and cybersecurity.

A seamless integration of these paradigms is still far from obvious when attempting to implement any of the International Organization for Standardization (ISO) standards.  Or ignoring ISO 26262 (“Functional Safety”) in favor of Agile may be possible for some industry players and “out of the box” non-automotive strategies, but established auto industry companies are required to adhere to ISO automotive standards or the product is unsafe.

With large-scale, autonomous projects on the rise, finding ways to implement agile development, functional safety and cybersecurity shall rise significantly.

The good news: the medical device industry already has recognized the need to integrate the two mindsets and has provided clues. The automotive industry, in its own way, will find the same truth toward safer solutions.

2. If You Can’t Measure It, You Can’t Improve It

In 2019, large-scale agile implementations have built up momentum and the existing scaling frameworks have yet to prove they are truly effective. That brings us to our next topic: increasing demand for agile KPIs (Key Performance Indicators) that make the effect of agility on the organization quantifiable.

Here, we are not talking about team-related metrics, which do not provide management with needed information to make decisions on business strategy. Even after all the success agility has shown in the past – especially on the team level – it still must prove it sustainably improves economic targets.

Agile approaches need to demonstrate they are at least as good as, or better than, traditional approaches for managing the cost of goods sold and associated balance sheets. Agility must not be an end in itself, or an ideology where it only works if one believes in it.

The major challenge ahead is to bridge agility, which is essentially a mindset, and focusing people on hitting desired economic targets, such as better quality, shorter time to market and lower costs in the long run.

At the moment, the industry is not able to demonstrate a respective causality (only a correlation). Even though the talk of a global slowdown has temporarily recessed on its own, the 2-year bond exceeded the value of the 10-year bond last August which implies a recession is likely this year, so managing the bottom line will be key.

Therein, understanding the costs of not improving project management, the switchover costs of improvement, the return on investment of changing and the capability of the internal team or new hires (e.g. Agile certifications) will become crucial measurements for executives looking to sustain or thrive in a tougher environment.

3. End-to-End Agility

One topic has massively pushed itself onto the agendas of many organizations and it will roll to its success: end-to-end agility.

The implementation of Agile methods and practices on the team level has increased significantly over the last few years. But to the same extent the understanding of organizations matured, that agility on the team level is just a local optimization and has virtually no effect on overall corporate performance.

It is understandable that organizations suddenly rediscover the mental model of “system thinking.”

From there, it is a short walk to end-to-end agility or business agility as it is often called. Essentially it is the ability of the whole organization to flexibly adapt to an ever-changing environment throughout entire value streams.

End-to-end agility is not an easy endeavor since an Agile mindset must be established across many subsystems with different capabilities. The people affected usually are not used to thinking and acting as a single entity. New networks must be created as well as common values and principles and ultimately a new culture must be established.

4. Hybrids

A major rethink currently is taking place, which will unfold in 2020. It seems an Agile enterprise no longer is a target for a future organization. Much more likely are hybrid organizations, which will include two characteristics:

Agile network structures, which aim at exploration (such as “innovation”) and implementation of the right products and services (such as “effectiveness”).

Hierarchical/pyramidal structures, which aim at exploitation and (cost) efficiency.

The industry realized that a blind adoption of consistent but non-automotive Agile approaches like the Spotify Model is a dead end and does not support automotive-specific business models. Automotive enterprises need these two “operating systems” under their hood at the same time to be future proof.

Here, the challenge is to find the right balance between exploration/effectiveness on one hand and exploitation/efficiency on the other and to develop the right processes and interfaces between these two worlds.

5. Losing the One-Size-Fits-All Approach

After years and years of pushing only a few specific Agile approaches and models, the automotive industry will start adopting “unbranded Agility” big time. Decision makers realize that a solution must fit the problem; it is not about implementing just any solution.

This trend seems to be a healthy countermovement in times where more and more organizations are literally showered with heavyweight Agile frameworks like SAFe (Scaled Agile Framework). Often “unbranded agility” has its starting point in Scrum implementations which pivot into other directions.

It is telling that even an honorable society such as Scrum.org has released a Kanban Guide for Scrum Teams. It is real progress when we as the Agile community put aside our dogmatism. There aren’t “Agile Police.” You won’t be named and shamed if you implement agility differently than The Gospel says. As mentioned above, agility must not be an end in itself; it must address the real pain points of the organization. Dogmatism is the wrong path.

Preview to Next Year’s List

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There will be a new buzzword. A new catchy acronym that makes us feel warm and fuzzy. And somewhere in there hopefully there will be the essence of what Automotive SPICE and other standards are truly seeking: a way to deliver differentiation on-time with fantastic quality.

Sergej Weber (left) is a Senior Consultant/Agile Coach at global automotive consultancy Kugler Maag Cie. Even after eight years in practice, he is a striving learner about all things Agile and is supporting leading German Tier-1 suppliers such as Bosch, Continental, and Hella with their agile implementation efforts. He can be contacted via [email protected].

Steve Tengler (not pictured) has worked in the auto industry on the connected car for over a quarter of a century for some of the top brands in world: Ford, Nissan and OnStar. He now is a Principal at the global consultancy Kugler Maag Inc. www.kuglermaag.us He has 40-plus publications, 50-plus patents, and a BSE and MSE from The University of Michigan. Contact him at [email protected].