Five Ways Agile in Automotive Will Pivot in 2019

The automotive industry is doing well, there obviously is no need for a profound change, except we know this is not true.

Sergej Weber

February 12, 2019

7 Min Read
Agility IV main art
Agility not a process but rather a mindset.

As Agile Coaches in Automotive, we consider it as one of our day-to-day duties to keep an eye on industry developments to evaluate how those may benefit (or harm) our customers’ efforts to adopt agility. Below we composed a list of topics we consider as emerging trends in automotive this year.

#1: Being Agile Instead of Doing Agile

Striving for “Being Agile” instead of “Doing Agile” is a quite old endeavor in the automotive industry. “Doing Agile” might mean applying some Agile practices (e.g. Sprints, Daily Stand-ups) and methods (e.g. Scrum) without actually adopting the Agile mindset. At best, this just leads to new meetings, roles, and artifacts; at worst its lip service to those perceived buzzwords without any of the return on investment. “Being Agile” on the other hand is a mindset and the ability of an organization to adapt to an ever-changing environment while continuously delivering value to current and/or unserved customers at a sustainable pace.

Although practitioners have a good understanding about the distinct difference between those two forms of agility by now, most implementations are still a far cry from “Being Agile”. For example, most automotive companies are not able to pivot from one solution to another in a timely manner while adapting and aligning their business (models), (product) architecture, processes, and organizational structure to the new conditions in the market. There are two main reasons for this: (1) lack of a sense of urgency and (2) a resulting inertia and resistance. The automotive industry is doing well, there is obviously no need for a profound change, except we know that this is not true. New competitors, shortened time to market, network technology, digitalization – you name it – disrupt the industry. Since automotive is a bull market now, companies are not in a hurry to change the way of working. But as columnist John McElroy recently reported, there is a looming rendezvous with destiny and an associated need to glean customers’ needs, pivot where required and stand-up new business models requiring both a process and mindset of urgent change.

From our point of view, “Being Agile” is the next logical and very crucial step towards business agility (as an ability of the entire company) to cope with today’s risks and tomorrow’s challenges in our industry. If you don’t believe us, ask Blockbuster, Borders, or Sears about their rendezvous with destiny.

#2: Agility Maturity Models

If we explain the difference between “Doing Agile” and “Being Agile” to customers, there is often a question regarding how mature is enough. “If you cannot measure it, you cannot manage it”, and within the dog-eat-dog world of limited budgets and fierce competition, understanding how much to invest is based upon reaching a quantitative threshold. In automotive, process/capability maturity models are well established and accepted, e.g. ASPICE, CMMI. The usual approach is to assess processes to evaluate their maturity. Those assessments and respective models serve to close the gaps and to improve processes. And, therein, nobody should be surprised that such maturity models and assessments are more and more requested by the automotive industry regarding their Agile implementations.

But here is when we need to be very careful. Agility is, by definition, not a process but rather a mindset. If such an evaluation would assume a specific setup of agility as “Being Agile” and it would take it as a benchmark, then it is an inherently wrong approach. Agility is not a little decal. You cannot just assume that replicating a company’s Agile Model (e.g. Spotify’s Agile Model) and applying it to automotive will succeed. This is not how it works! Now of course, we understand objections saying that maturity models are not necessarily about practices and that they can be about properties, too, ergo they can be about “Being Agile”. Unfortunately, existing Agile maturity models focus rather on practices not properties and are closer to “Doing Agile” than “Being Agile”.

It is naïve to think that maturity models will not show up more and more, especially against the background that it can be a profitable business. It is our hope, though, that measurers recognize and appropriately score agility as something more than a standardized process with artifacts. There are no best practices; only good practices. Everything else would be presumptuous and wrong.

#3: New Scaling Strategies

At the moment, scaling agility is extremely fashionable. In automotive, we scale to carry out highly complex projects in an Agile way. Often it is about taking Scrum as a building block for scaling-up a large number of teams. But theory sounds easier than reality. The effort to implement agility on a program level is much higher than on the team level. The more teams you include into the scope, the higher the implementation effort.

What is not clear right now: when is scaling effective? Many companies do not have a clear answer to this question. Furthermore, most companies scale-up agility too early. Before even being close to master agility on team level and without respective cultural, methodological, or technical foundations, automotive companies implement scaling. That means that the scaled structure inherits all the teething troubles from the team level. Here, too, a well-known rule applies: “garbage in, garbage out”.

Because business measures must be economic, companies soon will start evaluating the effectiveness of scaling approaches and they will start searching for the sweet spot, i.e. the balance between efficiency and flexibility (read: adaptability). In fact, it is not easy – maybe even impossible – to reach organizational ambidexterity with scaled agile approaches, meaning being efficient and flexible at the same time.

In this context, many automotive companies will conclude that their scaling approach does not provide the anticipated benefits. And since every movement has its counter-movement, they will start shifting to other, more promising scaling models, or in worse case scaling-down already implemented approaches.

However, one thing is quite clear: trends in automotive stay very long, scaling will be there for a long time, too – unless there is an obviously better alternative.

#4: Business Agility instead of Team Agility

More and more automotive companies understand the need for greater systems thinking to overcome historical, silo mentalities, thereby eliminating duplicative costs and mediocre synergies. As the industry will learn in 2019, the goal should be business agility instead of team agility. For a company it is much more beneficial if the whole organization can adapt to an ever-changing environment.

For example, imagine a company with a Business Development team in Germany, an Engineering team in Japan, a Communications Team in the United States, an IT team in Ireland and Sales teams on four continents. If the Engineering team alone is Agile, will this company keep up in an electrified, ride-sharing, autonomous business world? Will it reach their customers appropriately and meet their needs? Probably not. The whole organization must be Agile and able to pivot in coordinated fashion.

Therefore, our assumption is that more and more companies will start shifting their focus from local to global optimizations, i.e. implementing agility throughout entire value streams.

#5: Rediscovery of Kanban

Along those lines, to master systems-thinking, companies will search for alternate solutions that decrease time to market, are cost efficient, and focus on continuous improvement. Even though Scrum is the most used agile approach in automotive product development, it only addresses a team.

Kanban, on the other hand, addresses value streams – something that systems-thinking favors. Against this background, we expect that the next agile implementation wave will consider Kanban in concert with Lean Management. Kanban is very open, it does not prescribe any roles, meetings, or artifacts. That is why it takes more effort and discipline to succeed with Kanban: You must put a lot of attention into your workflow optimization and continuous process improvement.

Personally, we’re looking forward to all of these new developments in our industry. There will be a lot to do and a lot more to learn. By definition if we are all “Being Agile”, we will evolve throughout the entire year.

Sergej Weber 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].

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