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Empirically managed agile transformation

Agile Transformation Framework

Worked Example: Sewell & Kemp Ltd.
A walk-through of the first heartbeat in an agile transformation cycle. All names are fictitious.

Version 1.2

Situation Overview

Sewell and Kemp Ltd, a financial services house, has

been in existence for over two decades. Founded in the
1990's, the original partnership soon established itself
with an innovative strategy for managing client
investment porfolios. The company has grown more
than twentyfold in as many years, and now has
premises across two buildings in the Strand. S & K have
developed a reputation in the "boutique" provider market
for engineering long-term, bespoke solutions for
financially literate but time-poor investors. Their offering
Sewell & Kemp Ltd., The Strand
is based on a careful mix of concierge services and an
approach to business intelligence which they consider to be valuable intellectual property,
and one which has matured and become proven over the years.

However, this market is ripe for disruption by emerging players, and could also be at risk
from larger institutions with new innovation strategies. This risk is perceived by the S & K
Board to be very significant. Unless it is addressed, they expect the company's competitive

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advantage will be lost in five years. There have been recent instances of valuable
personnel being lured away to work for start-ups with alternative algorithms and
approaches, and hard-to-replace skills and institutional knowledge are now being lost. This
seems to have cast the scent of blood into the water. There have been attempts at
opportunistic purchase by I.P raiders, and worryingly to the Board, these have been under
increasingly poor terms.

A transformation consultancy is brought in

Kelton Warren Associates have been engaged as agile consultants on the S & K account.
Discussions with John Sewell, the CEO, and Jim Kemp, the CIO, highlight three essential
concerns:

➢ Firstly, it is felt that the company is insufficiently innovative for today's market. The
CEO believes that innovation opportunities have been missed, and that the
company has become too focused on the maintenance of existing products and
services and has short-changed the development of new ones.
➢ Secondly, the CIO believes that the company's existing operating model is starting
to fail under the strain of demand, ironically due to the success of the business so
far. In particular, clearance and settlement has become a bottleneck as the
techniques currently employed were not designed to scale. Impediments arise
much faster than the cycle time for completing the underlying transaction. The CIO
also believes that far too much of the IT department's efforts is spent on servicing
the technical debt of existing assets and that the situation is unsustainable.
➢ Thirdly, and largely due to an ongoing reactive need to service technical debt, the
CEO and CIO believe that they have a worsening picture of how the organization
can function strategically. Too much time is spent firefighting. Beyond that, they
receive conflicting information which has poor accuracy, is often out of date, and
which does not meet strategic planning needs.

Kelton Warren explain the process of agile transformation in an organization, and how it is
managed. The transformational effort will be captured as a backlog of changes, each of
which is the useful application of one or more agile "patterns", or good practices. The
backlog will be ordered and managed by a sponsored and qualified team: change agents

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who can roll out transformational change in S & K until the process is normed, and a self-
adapting and self-sustaining innovation network is in place.

The success of each change will

be evaluated empirically by means The Agile Transformation Pattern

of clear acceptance criteria and Rollout Team

iterative inspection. These Transformation

Backlog
Sponsored
Vision
Actionable Metrics
validated lessons help to
Transformation
reorganize and reprioritize each Heartbeat Daily
Cadence
Team

transformation backlog. A Cadence

Validated Rollout

measured and managed Strategy

enterprise transformation, like the Delivery Teams

agile delivery of a product, is

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sustainable, transparent, and

incremental in nature.

Step 1: A vision for change, and sponsorship for it

The CEO, Mr. Sewell, is keen to

achieve lean and agile efficiencies so
that the process of innovation is better
managed, and the company is put in an
Sponsored Vision
Senior management must This vision must acknowledge and authorize
articulate and sponsor a
clear strategic vision for
the Rollout Team as organizational change
agents. It must be absolutely clear that the
agile transformation across need for deep and persistent change is
the enterprise. recognized and sponsored at the highest
level.

improved position to develop new Sponsored

Rollout Team

Transformation Vision
products and services. He also wants Backlog

This strategic vision for

existing value streams to be optimized, change can help inform
the Rollout Team about
Transformation
Heartbeat
the priorities and
especially where they represent a organization of the
Transformation Backlog.

constraint to these plans.

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However Mr. Sewell is too risk-averse to sponsor an agile transformation across the whole
organization at this stage. He is willing to sponsor a local optimization in regards to the
currently unscalable clearance and settlement process, as this will be a constraint on
further change until it is resolved. He will also sponsor agile change in the value streams of
three early adopter initiatives that have been proposed by the CIO. Both men are also
keen to sponsor higher levels of transparency across the whole of the company.

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Further discussions with the board have resulted in the following vision being articulated
and agreed:

“Within six months, at least three agile workstreams will be in operation which
will serve as exemplars of agile practice for the rest of the organisation, and for
which any dependencies on the delivery of value will have been exposed or
resolved. Settlements will no longer be a constraint to growth, and transparency
across the organisation will be sufficient for wider transformational plans to be
made.”

The board say they are willing to sponsor this vision and to establish the necessary
priorities and sense of urgency for it to be implemented. They are also willing to sponsor
and empower a transformation team to guide the organization through its journey.

Step 2: Assembling the Transformation Rollout Team

The remit of a transformation team is to

shape and guide organizational change
until agile practice is normed. As agile
teams mature and gain competence in
self-organization, so the involvement of a John Sewell; Joseph Kemp; Dr. Samantha Henley
transformation team will lessen. A
Transformation Rollout Team consists of
a Sponsor and at least one Coach. The
Sponsor may elect to delegate his or her Rollout Team
Rollout Team
The Rollout Team helps the
change management responsibilities to a organization to change by
adopting agile practices across
the enterprise. It includes a clear
Transformation Backlog Owner.
Agile Agile Coaches
Transformation Agile Sponsor and at least one
Sponsor
Backlog Agile Coach.

➢ Mr. John Sewell, the CEO, is

sponsor. He represents senior Transformation
Heartbeat Daily
Cadence
Team
management, the stake it has in The Rollout Team
Cadence
decide which

enterprise agile adoption, and is agile patterns are

most applicable at Targets for change
any given time include Delivery Teams
and to whom and their stakeholders
responsible for communicating the Delivery Teams 7

transformational vision.

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 ➢ Mr. Joseph Kemp, the CIO, agrees to own the transformation backlog since the IT
function underpins the operating model of the company.
➢ Dr. Samantha Henley (Kelton Warren Associates) is engaged as the agile coach on
this account. She explains that she wishes to coach as far as possible through S &
K's own Scrum Masters, thus helping to develop an in-house coaching competency.

Step 3: Delivery Teams are identified

The CEO's sponsorship extends to the

three "early adopter" teams proposed Delivery Teams
Rollout Team
by the CIO (Settlements, Equities Alpha
In enterprise agile adoption,
and Equities Gamma), plus the DevOps Transformation Agile Agile Coaches everyone involved in delivering
products or services is a
Sponsor
Backlog potential “change target”. The
Customer team. The company PMO is Delivery Team is the basic unit of
agile transformation and change.
Examples include potential
also expected to take on an agile Scrum Teams or Kanban Teams.
Transformation
Heartbeat Daily
governance function and to thereby Team
Cadence
Cadence
improve transparency. Changes are
actioned as soon
as the Rollout
Team's WIP limit Delivery Teams
and the targeted
Delivery Team's
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➢ Settlements. This team of five cadence allows

people manages the clearance and settlement process for transactions. Many are
bespoke or involve off-exchange companies which rarely expose their stock to third
parties. These transactions are not handled through CREST or any similar
electronic system. This creates work whenever impediments arise as they require
manual intervention. In the early days of the company there were perhaps three or
four such exceptions in a week. However, due to growth of the business, the
opportunities provided by off-book trades, and changes in the portfolio algorithms
which emphasize concierged investment services, there are now around thirty a
day. Clearing and settling an impeded transaction can be expected to take the team
over 24 hours.
➢ Equities Alpha. This team of eight developers was responsible for developing S &
K's investment platform. This platform consists of bespoke tools which allow
portfolios to be curated via concierged services that use custom business analytics.
This platform is the company's "crown jewels" in terms of intellectual property, and it
underpins their operating model. The analytics platform has a good level of
automated unit testing, but the concierged services are not subject to test

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 automation at all. Alpha would like to introduce BDD coverage for these services at
some point, but currently does not have the resources or time to do so. They also
have problems regarding the priority and scope of work, since the company has
many stakeholders in its operating model and requests for changes can come from
several parts of the organization. Additionally, they find that they repeatedly "lose"
members of their teams to Gamma when the demands of servicing technical debt
become too great.
➢ Equities Gamma. A team of five developers, Equities Gamma is tasked with
servicing low-risk technical debt incurred by the platform. As with Team Alpha, the
priorities for servicing technical debt are confused due to there being multiple
stakeholders in the platform. Furthermore the remits of this team and the DevOps
Customer team have become blurred, and there is some tension between them.
More significant cases of technical debt are however serviced by Equities Beta
which, due to the critical nature of its work, is being excluded from the
transformation initiative for the foreseeable future.
➢ DevOps Customer. A team of 11 people, this team implements small changes to
platform services, principally to do with customer-level optimizations. In theory this
team also handles defect fixes to the codebase, but in practice these tend to be
handed over to Gamma or Beta as matters of technical debt. Perhaps due to the
variation in the type of work handled, the throughput of this team is unpredictable
and the ability to forecast delivery times is poor.
➢ PMO. The PMO consists of a senior project manager and a recently hired assistant.
The manager has extensive experience of corporate governance in stage-gated
environments, mainly in the public sector. The assistant comes from a small
company quality assurance background, and seems to be rather more familiar with
agile ways of working. Both are keen to develop their prospective roles within a new
agile governance function.

Step 4: Draft and refine a Transformation Backlog

The agile coach, Samantha Henley, explains to Jim Kemp, the Transformation Backlog
Owner, that the Transformation Backlog will be worked through iteratively at a
transformation cadence. Enough of a backlog must be in place to fuel at least one
transformation cycle, so that progress can be assessed on-cadence and the validated

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learning loop closed. The progress of the agile transformation initiative can be inspected
and adapted accordingly.

Jim, the Transformation Backlog Owner,

has prioritized improvement in the Transformation Backlog
Transformation Backlog Item
throughput of end-of-day settlements, Selected patterns
name, which must be unique
a supporting diagram, using a commonly understood class

Transformation modeling notation

since this is a constraint not only upon

a description of:
the intent behind the abstraction of the pattern

Backlog any proverbs that help illustrate its everyday relevance

any terms by which it might also be known - this entry is optional
the motivation for using it
the structure of the pattern, with particular relevance to the
supporting diagram
the situations in which the pattern is most applicable
the consequences of using the pattern

transformation but the ongoing

common implementations of the pattern
references to related patterns or items of interest

name, which must be unique

a supporting diagram, using a commonly understood class
modeling notation
a description of:
the intent behind the abstraction of the pattern
any proverbs that help illustrate its everyday relevance

sustainability of the business. He

any terms by which it might also be known - this entry is optional
the motivation for using it
the structure of the pattern, with particular relevance to the
supporting diagram
the situations in which the pattern is most applicable
the consequences of using the pattern
common implementations of the pattern
references to related patterns or items of interest

believes that an increase in the order of Change Target(s)

Delivery Team A
Pseudo Product Owners X, Y and Z

50% will be needed. Samantha Henley, Acceptance Criteria

Single Product Owner is identified

the agile coach, has advised that by

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limiting work in progress for a defined

value stream, throughput will be likely to go up. Setting a WIP limit of 5 items would
encourage each team member to work on no more than one issue at a time, and improve
the chances of a greater number of them being closed within one working day. An increase
in the order of 50% on end-of-day settlements is therefore framed as the desired outcome.
It is hypothesized that in order to achieve this, a WIP limit of 5 items will be needed, and
so this is set as the acceptance criterion for the change item.
Item Selected Patterns Target Beneficiaries Acceptance Criteria Coaching Estimate

Teamwork,
Throughput increase of 50% in end-
Limited WIP, Settlements Team WIP limited to 5 items 3
of-day settlements
Value Stream

Since Jim also wants a better understanding of the issues affecting settlements, Samantha
recommends adding a specific item for establishing transparency over this with a
mitigation plan, so exceptions can be raised to the PMO. Samantha expects that she will
have to coach new and better teamwork practices for these changes to take effect.
Item Selected Patterns Target Beneficiaries Acceptance Criteria Coaching Estimate

Teamwork,
Throughput increase of 50% in end-
Limited WIP, Settlements Team WIP limited to 5 items 3
of-day settlements
Value Stream

Inspect and Adapt,

Teamwork, Team has conducted at least one
“Issues” regarding settlements have Transparency, Sprint Retrospective, actions are
Settlements Team 5
a mitigation plan Management by elicited, exceptions raised to
Exception PMO

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Of course the sponsor wishes to improve transparency across the organization, and not
just in Settlements. This is another item for the Transformation Backlog: to improve
oversight of team risks and issues through an emergent Agile PMO, who will be able to act
on tolerances by exception should they be exceeded. Since this would be a significant
undertaking if all teams were to be targeted at once, Samantha recommends that the initial
focus be constrained to Settlements - where enhanced transparency is most urgently
needed - and on testing the remit of the new Agile PMO with this one team. The form this
transparency takes is left open, but some sort of dashboard, possibly with RAG status
levels, is suggested. Satisfactory progress would be evidenced if at least one agile health
check was conducted by the PMO. Jim agrees to this and prioritizes this work above the
last backlog entry, since it would help to establish the PMO's function in regard to this item.
Item Selected Patterns Target Beneficiaries Acceptance Criteria Coaching Estimate

Teamwork,
Throughput increase of 50% in end-
Limited WIP, Settlements Team WIP limited to 5 items 3
of-day settlements
Value Stream

Transparency, Settlements Team, PMO has conducted at least one

Organization has oversight of team
Management by Project Management agile health check at 2
risks and issues
Exception Office transformational cadence

Inspect and Adapt,

Teamwork, Team has conducted at least one
“Issues” regarding settlements have Transparency, Sprint Retrospective, actions are
Settlements Team 5
a mitigation plan Management by elicited, exceptions raised to
Exception PMO

The desired outcome is to have oversight of team risks and issues. The form this takes is
left open. However, it is expected that at least one health check will be conducted with the
Settlements Team. In other words, it is hypothesized that if just one health check can be
conduced for this team, then it will be enough to prove that satisfactory oversight can be
attained. This is therefore the only acceptance criterion for this item.

Due to the confusion in Alpha and Gamma teams regarding scope and priority, and
increasing tension between Gamma and DevOps Customer in terms of their remits,
Samantha recommends that platform product ownership be clarified and brought under
control, and team boundaries stabilized. An ability to account clearly for expenditure and
team utilization will therefore be key. A single Product Owner should be evident to both
Alpha and Gamma. The PO should have control over the budget, and the scope and
priority of work being asked of teams. This is the next item added to the Transformation
Backlog.

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Item Selected Patterns Target Beneficiaries Acceptance Criteria Coaching Estimate

Teamwork,
Throughput increase of 50% in end-
Limited WIP, Settlements Team WIP limited to 5 items 3
of-day settlements
Value Stream

Transparency, Settlements Team, PMO has conducted at least one

Organization has oversight of team
Management by Project Management agile health check at 2
risks and issues
Exception Office transformational cadence

Inspect and Adapt,

Teamwork, Team has conducted at least one
“Issues” regarding settlements have Transparency, Sprint Retrospective, actions are
Settlements Team 5
a mitigation plan Management by elicited, exceptions raised to
Exception PMO

Single PO is evident to both

Resources of Equities Project are Product Ownership, Equities Alpha Team, Alpha & Gamma, PO has
8
stabilized, brought under control Unbounded Team Equities Gamma Team executive control of equities
budget.

For this change item, clear accountability for value delivered and resources consumed is
what is wanted. It is hypothesized that this can be achieved by improving product
ownership for each team, such that it encompasses budget and scope. These are
therefore framed as the acceptance criteria.

As the Transformation Backlog Owner, Jim believes that the DevOps Customer team is the
next most important priority. The team's throughput is unpredictable, with some work being
delegated to Equities Gamma or Alpha. Samantha, the agile coach, suggests that weak
backlog management could be at the root of the problem, and that work which the team
are not prepared to do should be kept off the backlog altogether. With a well-maintained
backlog that is curated and owned by the DevOps Customer team, throughput can be
expected to stabilize and forecasting is likely to improve. She recommends coaching the
team to exercise this control on a daily basis through 15 minute team huddles.

Improved backlog management and forecasting is what is wanted for this change item.
The hypothesis is that a full week of daily huddles will facilitate this, and so this is set as
the criterion for acceptance.

Note that each item in the Transformation Backlog is estimated by Samantha to indicate its
relative coaching effort. This will help her gauge how much coaching work she can take on
during a Transformation Heartbeat. Only a coach is in a position to make such estimates.

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Item Selected Patterns Target Beneficiaries Acceptance Criteria Coaching Estimate

Teamwork,
Throughput increase of 50% in end-
Limited WIP, Settlements Team WIP limited to 5 items 3
of-day settlements
Value Stream

Transparency, Settlements Team, PMO has conducted at least one

Organization has oversight of team
Management by Project Management agile health check at 2
risks and issues
Exception Office transformational cadence

Inspect and Adapt,

Teamwork, Team has conducted at least one
“Issues” regarding settlements have Transparency, Sprint Retrospective, actions are
Settlements Team 5
a mitigation plan Management by elicited, exceptions raised to
Exception PMO

Single PO is evident to both

Resources of Equities Project are Product Ownership, Equities Alpha Team, Alpha & Gamma, PO has
8
stabilized, brought under control Unbounded Team Equities Gamma Team executive control of equities
budget.

Information Radiator,
Backlog of work for service delivery Team has conducted a full week
Inspect and Adapt,
is up-to-date, forecasts become DevOps Customer Team of daily huddles and metrics are 1
Backlog,
reliable stable from Customer perspective
Metrics

The need to improve the level of automated test coverage has been highlighted by Alpha,
and Jim believes that this is a general weakness across the platform estate. Samantha
recommends that BDD training be included on the transformation backlog so that the
sponsorship for it is made clear, and so that it can be prioritized appropriately. Settlements,
Alpha, and Gamma would all benefit and so an "epic" level transformation item is added to
the backlog, which targets all three teams. Samantha explains that as this item moves up
the transformation backlog it will be subject to further refinement, and may be potentially
broken down into BDD implementation items for each team which can be progressed
independently.

In essence then, improved traceability from business requirements to code is desired. That
is the real value of BDD test coverage. The Transformation Team hypothesize that BDD
training will be enough to kick-start this process, and so a training course is set as one of
two acceptance criteria. The second is that actual coverage must demonstrably improve
with each code check-in.

This is a particularly large coaching task and Samantha estimates it accordingly. She
explains to the Transformation Team that it will need breaking down into smaller, more
focused coaching tasks before the desired change can happen and traceability is
obtained.

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Item Selected Patterns Target Beneficiaries Acceptance Criteria Coaching Estimate

Teamwork,
Throughput increase of 50% in end-
Limited WIP, Settlements Team WIP limited to 5 items 3
of-day settlements
Value Stream

Transparency, Settlements Team, PMO has conducted at least one

Organization has oversight of team
Management by Project Management agile health check at 2
risks and issues
Exception Office transformational cadence

Inspect and Adapt,

Teamwork, Team has conducted at least one
“Issues” regarding settlements have Transparency, Sprint Retrospective, actions are
Settlements Team 5
a mitigation plan Management by elicited, exceptions raised to
Exception PMO

Single PO is evident to both

Resources of Equities Project are Product Ownership, Equities Alpha Team, Alpha & Gamma, PO has
8
stabilized, brought under control Unbounded Team Equities Gamma Team executive control of equities
budget.

Information Radiator,
Backlog of work for service delivery Team has conducted a full week
Inspect and Adapt,
is up-to-date, forecasts become DevOps Customer Team of daily huddles and metrics are 1
Backlog,
reliable stable from Customer perspective
Metrics

Moving forward, business value of

requirements is traced to
implementation for all early
adopters
Settlements Team, Each team has implemented
Test Driven
Equities Alpha Team, BDD practices, and coverage 40
Development
Equities Gamma Team improves with each check-in

Samantha recommends that two other items be included on the transformation backlog at
this early stage. Firstly an organizational Definition of Done should be established which
asserts minimum quality levels. This will allow the organization, through the PMO, to have
oversight of team quality so risks to brand and business are controlled. Each team should
then improve on the standard by establishing and maintaining its own Definition of Done.

Organizational oversight of quality is what is wanted here. The Transformation Team

hypothesize that an Organizational Definition of Done will facilitate this. The formulation,
ownership, and reference of such a DoD by all teams are the acceptance criteria for this
change.

The second item that Samantha recommends be included is the production of a timebox
review record by each team. This may take the form of burndown or burnup charts which
show the progress of work done and work remaining. An information radiator may be used
for this purpose, or summary documents can be produced for stakeholders. The objective
is to ensure that transparency and control can be evidenced by each agile team.

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The early adopter teams are therefore expected to provide better visibility of work
remaining to stakeholders. That is the desired change. If teams can provide that visibility in
the form or a burndown or burnup chart, such as in a timebox review record or similar
presentation, then that would be satisfactory as an acceptance criterion.
Item Selected Patterns Target Beneficiaries Acceptance Criteria Coaching Estimate

Teamwork,
Throughput increase of 50% in end-
Limited WIP, Settlements Team WIP limited to 5 items 3
of-day settlements
Value Stream

Transparency, Settlements Team, PMO has conducted at least one

Organization has oversight of team
Management by Project Management agile health check at 2
risks and issues
Exception Office transformational cadence

Inspect and Adapt,

Teamwork, Team has conducted at least one
“Issues” regarding settlements have Transparency, Sprint Retrospective, actions are
Settlements Team 5
a mitigation plan Management by elicited, exceptions raised to
Exception PMO

Single PO is evident to both

Resources of Equities Project are Product Ownership, Equities Alpha Team, Alpha & Gamma, PO has
8
stabilized, brought under control Unbounded Team Equities Gamma Team executive control of equities
budget.

Information Radiator,
Backlog of work for service delivery Team has conducted a full week
Inspect and Adapt,
is up-to-date, forecasts become DevOps Customer Team of daily huddles and metrics are 1
Backlog,
reliable stable from Customer perspective
Metrics

Moving forward, business value of

requirements is traced to
implementation for all early
adopters
Settlements Team, Each team has implemented
Test Driven
Equities Alpha Team, BDD practices, and coverage 40
Development
Equities Gamma Team improves with each check-in

Settlements Team,
Organization has oversight of team Equities Alpha Team, Organizational Definition of Done
quality so risk to brand and Done Equities Gamma Team, is articulated, owned by PMO, 5
business is controlled DevOps Customer Team, and referenced by all teams
PMO

Settlements Team, Each early adopter team

Work remaining is clear to Information Radiator, Equities Alpha Team, demonstrates burndown in their
2
organizational stakeholders Metrics Equities Gamma Team, end-of-Sprint Timebox Review
PMO Record

Step 5: Establish a cadence for enterprise

transformation

Samantha explains to Jim and John that, as the Transformation Team, the three of them
are responsible for shaping and guiding organizational change. They will need to to meet
at regular intervals to inspect and adapt the progress being made, until such time as self-
managing agile teams are in place. They will need to exert a greater level of control to
begin with, but as the teams mature and become accountable for their own agile ways of

12
working, the Transformation Team will be able to entrust them to a greater degree. This
implies that the transformation cadence should initially be quite short...with more
opportunities for the Transformation Team to inspect and adapt progress...and that it
should be expected to gradually lengthen. Samantha recommends that the Transformation
Cadence be set initially to one week, as this would allow enough time for reasonable
attempts at coaching Transformation Backlog items to be made. During this time, she
believes she can start to coach items 1, 2, 4, and 5 on the Transformation Backlog. Item 3
is dependent upon item 2 and ought to be deferred until after the first transformation cycle.

Jim and John agree to this, and to

meet with her every Friday afternoon
Transformation Heartbeat
Rollout Team
The Rollout Team manages
- once each transformation heartbeat organizational change through a
regular heartbeat of inspection and
adaptation. This heartbeat must
- for thirty minutes in order to gauge Transformation
Backlog
Agile Agile Coaches
Sponsor
accommodate and inform the cadence
of organizational delivery cycles as
well as operational day-to-day work.
progress, and to adapt the plan of
The cadence of a
Delivery Team
work as needed. This will be Transformation could be aligned
Heartbeat Daily to a Scrum Sprint
Cadence or Kanban
scheduled as soon as possible after Team inspection cycle.
Cadence
Changes are
delivery team events (such as actioned as soon
as the Rollout
Team's WIP limit
reviews and retrospectives) so that and the targeted Delivery Teams
Delivery Team's
cadence allows 8
the most timely information is
available.

Step 6: Establish a team cadence for change

The transformation team has agreed to meet, once a week, to inspect and adapt the
progress of organizational change. However, this does not mean that a weekly cadence is
appropriate for delivery teams themselves. Their cadence is influenced by other factors,
such as the optimum release frequency inherent to the product environment, and their own
ability to inspect and adapt their engineering process.

After meeting with the delivery teams, and the business representatives of the platform
product, Samantha recommends a 2-week Sprint cadence for Equities Alpha and Gamma.
This will allow the teams to frame reasonable Sprint Goals for the product, to co-ordinate
with each other on the same cadence, and to delivery significant increments of business
value. A twice-weekly cadence will also allow the Transformation Team a mid-sprint

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opportunity to assess progress and to remove any impediments, until such time as the
PMO is in a position to provide oversight and governance.

Samantha recommends that the PMO

share the transformation team's Team Cadence
cadence of one week, so that their Rollout Team
A Transformation Heartbeat must be no
longer than one month. This alignment
allows the Rollout Team to assess the
capabilities in this regard can be Transformation Agile Agile Coaches
progress of organizational change at a
Sponsor
juncture that is sympathetic to all
Backlog teams and their delivery
nurtured and further developed. She responsibilities.

Delivery Teams are

also recommends a weekly cadence free to choose
shorter periods,
Transformation such as two or
for the Settlements team as their work Heartbeat Daily even one week
Cadence cadences, as long
Team
as they all align
is flow-based rather than goal-driven, Changes are
actioned as soon
Cadence
with the
Transformation
as the Rollout Heartbeat. An
and there is no clear reason not to Team's WIP limit example of a Team
Cadence might be
and the targeted
Delivery Team's a Scrum Sprint.
articulate it to the Transformation cadence allows Delivery Teams 9

Team and the PMO.

Step 7: Action change

As the agile coach on the Transformation Team, Samantha now begins to coach the
changes on the backlog. Four items are identified by her as achievable in the first
heartbeat and brought into progress. One issue (for an issue mitigation plan) is deferred
for consideration in the next heartbeat because of its dependency on establishing
organizational oversight of team issues.
Item Selected Patterns Target Beneficiaries Acceptance Criteria Coaching Estimate

Teamwork,
Throughput increase of 50% in end-
Limited WIP, Settlements Team WIP limited to 5 items 3
of-day settlements
Value Stream

Transparency, Settlements Team, PMO has conducted at least one

Organization has oversight of team
Management by Project Management agile health check at 2
risks and issues
Exception Office transformational cadence

Inspect and Adapt,

Teamwork, Team has conducted at least one
“Issues” regarding settlements have Transparency, Sprint Retrospective, actions are
Settlements Team 5
a mitigation plan Management by elicited, exceptions raised to
Exception PMO

Single PO is evident to both

Resources of Equities Project are Product Ownership, Equities Alpha Team, Alpha & Gamma, PO has
8
stabilized, brought under control Unbounded Team Equities Gamma Team executive control of equities
budget.

Information Radiator,
Backlog of work for service delivery Team has conducted a full week
Inspect and Adapt,
is up-to-date, forecasts become DevOps Customer Team of daily huddles and metrics are 1
Backlog,
reliable stable from Customer perspective
Metrics

14
➢ Item: “Throughput increase of 50% in end-of-day settlements”. Samantha
coaches the Settlements Team to limit their WIP to 5 items. She teaches them to
understand their value stream and to collaborate, as a team, so that throughput can
be increased. Daily huddles
are introduced as key inspect- Change Actioning
and-adapt opportunities in this Transformation
Rollout Team

Backlog
regard.
➢ Item: “Organization has
Transformation
Heartbeat Daily
oversight of team risks and Team
Cadence

Cadence
issues”. Samantha coaches The current highest
priority item is taken
from the backlog by
the PMO to conduct an agile the Rollout Team and
applied to the Delivery Teams
identified Suitable targets

health check for the organizational

target(s)
include Delivery
Teams and their
stakeholders 6

Settlements Team. A checklist

is drafted with approximately 40 measures that address the various dimensions of
agile practice. She coaches them on the meaning of each measure, and to
understand when tolerances are exceeded and require escalation.
➢ Item: “Resources of Equities Project are stabilized, brought under control”.
Samantha works with the business owners of the platform to build clearer product
ownership, with control over budgeting, and coaches them how to work with the
Alpha and Gamma to maximize the value being delivered. Alpha and Gamma are
taught to identify clear Sprint Goals with product owners, and to conduct daily
scrums so that progress towards the goal can be checked, and the sprint plan
revised if necessary.
➢ Item: “Backlog of work for service delivery is up-to-date, forecasts become
reliable”. Samantha coaches the DevOps Customer Team to conduct daily huddles
in which they inspect and adapt their work. She coaches them to use a Kanban
Board so work is more transparent and can be better controlled, and teaches them
how to draw basic metrics including cycle time, throughput, and latency.

15
Step 8: Keep a finger on the pulse, every day

Samantha has coached the

Settlements, Equities Alpha, Equities Daily Cadence
Rollout Team
Gamma, and DevOps Customer teams
to inspect and adapt their work on a Transformation
Backlog
Agile Agile Coaches
Sponsor
Each Delivery Team must review
its efforts on a daily basis, and
refocus them if necessary.
daily basis. This takes the form of daily Examples of daily cadence
include timeboxed Scrum
meetings and Kanban standups.

huddles, scrums, and stand-ups which Transformation

Heartbeat Daily

are time-boxed to fifteen minutes. These Team

Cadence

Cadence
Changes are
daily sessions provide an opportunity for actioned as soon
as the Rollout
Team's WIP limit
Samantha, and the teams, to assess and the targeted
Delivery Team's
Delivery Teams

cadence allows 10

progress of each change item that has

been brought into play from the Transformation Backlog:
➢ Item: “Throughput increase of 50% in end-of-day settlements”. The
Settlements Team initially has far too much work in progress, which is quite clear
from the Kanban board Samantha taught them to use. It is not until the third day
that this begins to stabilize. By the fourth day it is clear that the team is starting to
value the discipline of limiting WIP, and improving the focus on completion. By the
end of the week, WIP is considerably reduced and is ostensibly limited to 5 items,
but Samantha believes that some work is still being pushed onto the team and is
being dealt with surreptitiously.
➢ Item: “Organization has oversight of team risks and issues”. Samantha meets
with the PMO every day to appraise them of progress and of any problems. By
explaining to them the real-world issues that affect an agile transformation, she
thereby helps them to understand the business of agile governance, and to prepare
intelligently for conducting an agile health check.
➢ Item: “Resources of Equities Project are stabilized, brought under control”.
Alpha and Gamma were already conducting "sprints" in a fashion, but the rigor in
their approach was weak. Business representatives would attend daily scrums and
hold court, changing team priorities, and expecting status reports and assurances
about the rate of progress. Samantha improves the rigor in each daily scrum by
enforcing the 15 minute time-box limit and by coaching the teams to own their
Sprint Plans, and to communicate progress with business, through clear product

16
 owners, outside of the daily scrum forum. Product Owners are no longer allowed to
participate in daily scrums...a change which is resisted by the affected Business
managers, and which Samantha has to quietly escalate to the sponsor so he can
handle the politics his own way. Also, no progress is being made on revising
budgetary controls. The CEO, as sponsor, then has to make his sponsorship for
deep change across the organization evident.
➢ Item: “Backlog of work for service delivery is up-to-date, forecasts become
reliable”. In each daily huddle, the DevOps Customer team are taught to keep their
metrics up-to-date with regard to cycle times, throughput, and latency. Opportunities
to limit WIP further are exposed, such as by combining certain stations in the value
stream. By the fourth day, throughput metrics are obtained which suggest a
steadying rate and a probability of being able to assert a standard deviation metric
in the near future.

Step 9: Verify outcomes

The weekly meeting of the

Transformation Team is an opportunity Verification
Each item on the Transformation
to verify each change item being Backlog has Acceptance Criteria. These
are evaluated by the Rollout Team at
least once every Transformation
actioned. Are the acceptance criteria Heartbeat. Once the criteria are met the
item is retired, and further changes

being met? Have the changes been Rollout Team brought into progress from the backlog.

implemented by the teams? Transformation

Sponsored
Vision
Backlog Actionable Metrics

Transformation

By the end of the first week - the first Heartbeat Daily

Cadence
Team
Cadence
Transformation Heartbeat - the
12
following progress has been
evidenced:
➢ Item: “Throughput increase of 50% in end-of-day settlements”. The
Settlements Team has limited work in progress significantly, and their Kanban Board
indicates that only 5 items are ever in progress at any one time (one item per team
member). However, Samantha believes that some additional work is being pushed
onto the team "on the sly" and that this is not being recorded. The acceptance
criteria for this change have not therefore been met to her satisfaction.

17
 ➢ Item: “Organization has oversight of team risks and issues”. The PMO has
conducted a health check with the Settlements Team, and it is available for
inspection. The acceptance criteria for this change are therefore met.
➢ Item: “Resources of Equities Project are stabilized, brought under control”.
The Equities Alpha and Gamma teams now have clear product ownership and
agreed Sprint Goals. Following mid-week intervention by the Sponsor, Product
Ownership and development team responsibilities are more clearly delineated, and
business interference in team decision making has been reduced. Team boundaries
have begun to stabilize. Budgetary authority has now been devolved onto Product
Owners, albeit only in the narrowest official terms. The acceptance criteria are met.
➢ Item: “Backlog of work for service delivery is up-to-date, forecasts become
reliable”. The DevOps Customer Team is able to offer throughput and cycle time
metrics and some projections for latency. The acceptance criteria have been met.

Step 10: Harvest metrics

At the end of each transformation

heartbeat, the Transformation Team
must determine not only whether the
acceptance criteria for each change
have been met, but also whether the
expected value has actually been
gained. Improved value is, after all, the
Actionable Metrics
The success of agile transformation
should be measured in objective terms.
Adjustments can then be made where
needed, the Transformation Backlog can
be revised, and the effectiveness of the
transition thus optimized. A Rollout
Team should carefully select metrics
Rollout Team
that are appropriate for this purpose.
Sponsored
Transformation Vision
Backlog Actionable Metrics

purpose of change. The team will look Transformation

Heartbeat Daily
Cadence
Team
for actionable metrics which represent Cadence

empirical evidence of progress. Note 13

that at this stage, they will not interpret

the evidence...they will merely gather it.
➢ Item: "Throughput increase of 50% in end-of-day settlements". The acceptance
criteria of limiting WIP to 5 items has not been met to the satisfaction of the
Transformation Team. In terms of empirical evidence of progress, there has only
been a 30% improvement in Settlements throughput when a 50% improvement was
expected.

18
 ➢ Item: "Organization has oversight of team risks and issues". A satisfactory
health check has been conducted for Settlements and so the acceptance criteria
have been met. Empirical evidence of improved organizational oversight is available
in the form of a dashboard. The Transformation Team have clear visibility of RAG
status levels: 20 Red, 11 Amber, 12 Green.
➢ Item: "Resources of Equities Project are stabilized, brought under control".
Ownership of the Product Backlog has been clarified to teams Alpha and Gamma,
with budgetary authority having been vested in a clear Product Owner. The
acceptance criteria have thus been met. There is empirical evidence of the desired
stabilization and control of resources. A budget of £20,100 per Alpha Sprint has
been allocated along with £14,800 for Gamma; these budgets are all under control
of the respective PO.
➢ Item: "Backlog of work for service delivery is up-to-date, forecasts become
reliable". The DevOps customer team can offer stable throughput metrics of the
quality hoped for, and team huddles have been conducted each day to the
satisfaction of the Transformation Team. The acceptance criteria are met. Empirical
evidence of an improved forecasting ability is available: throughput averages 3
items per day, with an average wait 5 days. However, there is evidence that the
team backlog is still not being kept up-to-date.

Step 11: Validate learning

A truly agile process is one that

undergoes continuous improvement,
Validated Learning
with frequent inspection and Rollout Team

adaptation. The end of a Transformation Sponsored

Backlog Vision

transformation heartbeat gives an Actionable Metrics

organization's Transformation Team Transformation

Heartbeat

an opportunity to gauge the results

of each change that has been
attempted. Have the acceptance
criteria been met? If so, did the
The implementation of agile change should result
in tangible improvement. The Rollout Strategy,
which informs the Transformation Backlog, should
be updated accordingly. If the expected
improvements do not transpire, then the change
Validated Rollout can be reinstated on the backlog with an improved
Strategy
pattern selection and/or acceptance criteria.

expected improvement actually 14

happen? If no empirical evidence of

19
improvement is found, then a change and its acceptance criteria may not have been fit for
the intended purpose, and lessons must be learned.

➢ Item: "Throughput increase of 50% in end-of-day settlements". The attempt to

limit Work in Progress has resulted in an improved Settlements throughput...though
not to the level hoped for. Moreover, since the acceptance criteria have not been
met to the satisfaction of the Transformation Team, this change item cannot be
considered to have been completed. The original hypothesis that limiting WIP to 5
items will result in a 50% improvement in throughput still seems to be fair, but only if
the limit is genuinely constrained. The Transformation Team decide that the sponsor
(the CEO) must personally intervene in this case, and reinforce the message that
the Settlements Team must not do work "on the sly". Based on the evidence
available, if WIP is genuinely limited to 5 items, then the desired improvement does
seem plausible. This item will therefore remain in progress over the next
transformation hearbeat.
➢ Item: "Organization has oversight of team risks and issues". Improved
organizational oversight was wanted. It was hypothesized that a health check,
conducted for Settlements under the auspices of the PMO, would demonstrate that
oversight. The health check was conducted and the acceptance criteria for doing so
were met. Improved oversight has now been made available as a RAG status
dashboard. In other words the hypothesis for change has been validated, the
change is now complete, and the item can be closed.
➢ Item: "Resources of Equities Project are stabilized, brought under control".
Both Equities teams now have clear team membership and resource boundaries,
which is what was wanted. The hypothesis that clear product ownership, with
budgetary authority, would stabilize the situation has been validated. The
acceptance criteria have been met, which means that no additional work is needed
to implement this change. The change item can therefore be closed.
➢ Item: "Backlog of work for service delivery is up-to-date, forecasts become
reliable". Although the acceptance criteria for this item were met, the desired
outcomes have only been partially achieved. Forecasts have indeed become more
reliable, but the service delivery backlog is not being kept up to date. The
hypothesis has not therefore been entirely validated - in other words, while

20
 conducting daily huddles for DevOps Customer did improve the quality of the
available metrics, the team did not keep their backlog current. Nevertheless, the
acceptance criteria were met and so this change item must be closed. Since
additional work needs to be done to achieve the change desired, a new change
item must be added to the Transformation Backlog with improved acceptance
criteria. A specific item for controlling the service delivery backlog is therefore
added, with the expectation that the DevOps Customer Team find their own solution
to the problem. Options, such as coaching backlog refinement sessions with the
team, will be available. The acceptance criterion is that the DevOps Customer team
must provide clear evidence to the Transformation Team that their backlog is being
managed.

Step 12: Validate the transformational rollout strategy

One full heartbeat of the transformation cycle has now taken place. At the start of the
heartbeat a small number of changes from the Transformation Backlog were brought into
progress and coached. By the end of the heartbeat, we are able to see that 3 of those 4
items have been completed to the satisfaction of the acceptance criteria, and may
therefore be closed. One item still remains in progress, since its acceptance criteria have
not yet been met and the proposed change remains viable. Lessons have been learned
which will facilitate its implementation over the course of the next transformation heartbeat.
One new item has been added to the Transformation Backlog in order to bring about a
change for which new acceptance criteria are clearly needed.

The validated learning loop has thus

been closed for those change items Validated Rollout Strategy
Rollout Team

which have been selected and

Transformation Sponsored
Backlog Vision
actioned. The next and final thing to Actionable Metrics

do is to consider any lessons for the Transformation

Heartbeat

transformational strategy itself. We

must consider a holistic view of
organizational progress, and not
limit ourselves to a microscopic one
The lessons learned from coaching change must be
used to improve and further refine the organization's
agile transformation strategy. By using actionable
Validated
metrics to gauge success, refinements to the
approach can be validated. The composition and
Rollout ordering of a good Transformation Backlog is
Strategy informed by such considerations.

of small individual changes. 15

21
A transformational strategy is determined by two components. These are:

➢ the Strategic Vision, which frames the hopes and ambitions of the Sponsor for
organizational change, and
➢ the Transformation Backlog, the content and ordering of which is the Transformation
Team's plan for implementing the Strategic Vision.

John Sewell (the CEO and Sponsor), Jim Kemp (the CIO and Transformation Owner), and
Samantha Henley (the Agile Coach) comprise the Transformation Team. This small group
have started the transformation and taken the company through one initial cycle of
change. They have started in a small way, but the initiative has gained traction and the
team may soon be in a position to extend it further. So now, at the end of the first
transformation heartbeat, the vision for change can be reviewed and challenged:

“Within six months, at least three agile workstreams will be in operation which
will serve as exemplars of agile practice for the rest of the organisation, and for
which any dependencies on the delivery of value will have been exposed or
resolved. Settlements will no longer be a constraint to growth, and transparency
across the organisation will be sufficient for wider transformational plans to be
made.”

This vision still appears to be useful and achievable to the team. The team see no need to
revise it at this stage...but they expect they will do so as the transformation progresses,
and almost certainly as the six-month window nears. Their view of organizational strategy
will very likely have changed by then, and will continue to change as the strategic planning
horizon rolls forward. For example, if progress is good, the vision may be extended to
encompass further teams. Samantha has suggested that innovation and improved quality
might also form part of the evolving vision, an idea which John and Jim find interesting and
agree to consider further.

Now the team turn their attention to the Transformation Backlog. Three of the eight original
items have been actioned and closed in this iteration. One new item has been added, and
one is currently in progress. The Transformation Team now ask themselves: How well
does this backlog reflect the organization's strategy for change? Can we improve it?

22
Samantha, the agile coach, recommends that one further change should be considered at
this stage. If the three agile workstreams are to be exemplars of agile practice as per the
strategic goal, they will need to become less reliant on an agile coach. Scrum Masters,
and others in a similar position, ought to be able to provide the necessary help and
guidance to their teams, and to potentially represent them in the future at a Transformation
Team level. This will require one-on-one coaching with each Scrum Master or equivalent
leader so they can fulfil such a role. An item for Scrum Master coaching is therefore added
to the Transformation Backlog. An objective assessment of basic Scrum Master knowledge
would be a useful measure at this stage, and so the passing of a elementary online test is
set as the acceptance criterion. This item is prioritized by the Transformation Owner to the
top of the Transformation Backlog.

Now that the first transformation cycle is over and the validated learning loop has been
closed, the next cycle can begin. The Transformation Team are in a position to choose
further changes from the backlog, to bring them into effect over the next heartbeat, and to
continue guiding the organization on its agile transformation journey.

23