Why Establishing an Agile Transformation Office is Essential for Achieving Lasting Impact

For a considerable span of time, organisations spanning various sectors have been striving to transition from conventional, sluggish hierarchies to agile frameworks, prioritising swift decision-making. The onset of the COVID-19 pandemic accelerated this imperative, underscoring the necessity for adaptability, rapidity, and efficacy. Consequently, decision-making authority diffused and broadened within companies, fostering accelerated, real-time learning processes.

With the importance of agility now fully established, some will seek to deepen their commitment to agile practices, while others will embark on this journey for the first time to capitalize on its advantages. Regardless of the stage of transformation, setting up an Agile Transformation Office (ATO) can significantly enhance the likelihood of success. Whether the transformation targets specific segments of the enterprise or encompasses the entire organisation, adopting a structured approach is crucial for delivering tangible value throughout the journey.

An ATO plays a pivotal role in steering and overseeing the transformation process, ensuring widespread participation across the organisation, and crucially, facilitating enduring cultural shifts. Contrary to serving as a supervisory body or adding bureaucratic layers, the ATO seamlessly integrates into the existing framework, leveraging pertinent business expertise to actualize concrete results.

Achieving genuine agility within an organisation is a gradual process that

unfolds over time in distinct phases. Through centralisation, an ATO not only drives the transformation forward but also safeguards the enduring nature of cultural shifts throughout the organisation. It plays a vital role in pinpointing and addressing obstacles that may impede the transformation's momentum, while ensuring a steadfast commitment to value creation. This article will delineate the objectives, framework, and

communication channels of ATOs, alongside outlining the duties and proficiencies required within their roles.

Unlocking Value: The Impact of ATO Structure

Fundamentally, enterprise-level agility entails the strategic alignment of strategy, structure, processes, personnel, and technology towards a revamped operational paradigm. This is accomplished through the reconfiguration of the organisation, emphasising numerous self-directed, top-performing teams (backed by a dependable infrastructure), and fostering a shift in organisational culture.

An agile transformation is characterised by its dual nature: it is both expansive and iterative. It is expansive in its clarity of purpose, delineating the organisation's objectives and establishing the necessary frameworks and procedures to attain them. Simultaneously, it is iterative, demanding that the organisation continuously experiment, absorb lessons, and adjust its trajectory as it implements each aspect of the new operational framework (See Exhibit 1).

Exhibit 1

Establishing an ATO requires organisations to make strategic choices across three domains: its purpose, its framework, and the delineation of key roles and duties.

First Design Decision: Consensus on the Purpose and Scope of the ATO

As crucial as it is to attain alignment on the overarching objective of the transformation, it is equally vital to define a clear purpose for the ATO that garners consensus among leaders across the organisation, with input extending from the C-suite to individuals who will hold pivotal roles within the ATO. This initial step establishes the value proposition of the ATO and explicitly links it to the underlying rationale behind the transformation.

For instance, a telecommunications firm established an ATO to spearhead cultural shifts during its agile transformation. With a distinct purpose and robust sponsorship, the ATO galvanised the entire organisation around its objectives: delivering value to customers, employees, and the business alike. Serving as a central hub, the ATO engaged leaders, functions, and business units to explore and implement innovative work methods.

An ATO's mandate sets it apart from a traditional PMO in six pivotal ways:

1. Orchestrating the roadmap for transformation to extend agility throughout the organisation. This entails specifying the timing and method of implementation for changes, as well as outlining the ATO's role in facilitating each stage of the transformation. It is imperative for key stakeholders to concur on a clearly defined timeline and tempo.

2. Developing capabilities, which encompasses recruiting and enhancing the skills of personnel. For a successful transformation, the organisation must cultivate new competencies for critical positions, such as product owners, tribe leaders, and agile coaches (further details on these roles provided below). The ATO plays a crucial role in influencing the establishment of a talent pool for these positions, both internally and externally, in partnership with other organisational departments, such as HR.

3. Acting as advocates for culture and change. ATO members must exemplify the principles, behaviours, and mindsets mandated by the transformation to serve as role models for the rest of the organisation. Additionally, they should actively advocate for the benefits, values, and goals of the transformation through initiatives like roadshows and other forms of engagement with the wider organisational community.4. Mentoring senior executives. The ATO provides coaching sessions for senior leaders to empower them to champion the transformation and demonstrate leadership through their actions. Agility necessitates a transformation that operates from both the top-down and bottom-up. Senior leaders are expected to exemplify the new behaviours, delineate essential mindsets, and set the precedent. They regularly participate in agile events to support their teams effectively.5. Overseeing interconnections. Given its prominent visibility, the ATO assumes the role of identifying dependencies and potential synergies, acting as the ultimate checkpoint for pivotal decisions.6. Developing and enhancing optimal methodologies. As the transformation progresses, the ATO continuously refines its approach to best practices and behaviour patterns that should be embraced organisation wide.
   

The decision regarding whether the ATO should undertake all six mandates or only select ones depends on the overarching objective of the transformation and the organisation's progress along its agile journey. Typically, the ATO focuses on steering the design and execution of the agile roadmap and fostering agile capabilities—two key distinguishing features of an ATO.

While this serves as a solid starting point, organisations may fully leverage the benefits of an ATO when it possesses clear sponsorship and a mandate encompassing all six categories. Generally, the ATO's mandate evolves over time as the organisation's support needs change and the transformation's maturity level advances. To ensure alignment and accountability, the ATO should have well-defined objectives or success criteria to gauge its progress.

For instance, a banking institution outlined its ATO's purpose as delivering value across the business, particularly through the adoption of agile mindsets and methodologies throughout the bank. The ATO adopted a test-and-learn approach by establishing multiple squads in a "garage" setting, allowing them to operate autonomously initially without impacting the broader organisation. This experimental space aimed to simulate the larger transformation model and enabled the garage teams to make and refine decisions within the new operational framework. The bank's Chief Human Resources Officer (CHRO) played a pivotal role in prioritising and integrating lessons learned from the garage initiative and scaling capabilities across the organisation. As the

rollout progressed, the ATO assumed the central role in promoting agile practices and driving cultural change throughout the organisation.

In another example, a telecommunications company sought to expand its agile transformation across a significant portion of its core business. The organisation defined the purpose of its ATO as catalysing and sustaining an agile culture, collaborating to reshape the underlying DNA for enhanced performance. Led by the Chief Digital Officer, the organisation swiftly launched seven agile tribes within ten months, exposing as many as 800 individuals to the new methodologies and mindsets. The ATO served as the linchpin of the telco's transformation, spearheading communication efforts and designing the new organisational model across both agile and non-agile divisions. In this capacity, the ATO not only defined new roles and responsibilities and their interactions with non-agile segments but also provided coaching to facilitate the transition for individuals.

Second Design Decision: Determine the Reporting Structure and Organisational Integration of the ATO

Determining the appropriate reporting lines for an ATO hinges on the organisation's context and cultural dynamics. In successful endeavours, we typically observe that the leader of the agile transformation reports directly to the CEO or a top-level executive—a configuration that fosters close alignment and backing from senior leadership. For example, in an Asian telecommunications company, the ATO reported to the Chief Human Resources Officer (CHRO), who served as the overarching sponsor of the transformation. Conversely, in a North American financial institution, the ATO leader reported directly to the CEO, emphasising accountability, and ensuring successful outcomes throughout the transformation journey. In another financial institution, the

ATO reported to the Chief Operating Officer (COO), who spearheaded the transformation efforts across the organisation.

Irrespective of the chosen reporting line, it is imperative to integrate the transformation seamlessly into the core business priorities rather than treating it as a standalone change initiative. To underscore this integration and maximize the transformation's impact, many organisations establish solid or "dotted" reporting lines between functional or business leaders and the execution leaders within the ATO. Furthermore, capabilities and roles essential for scaling the transformation (such as agile coaches, DevOps specialists, or technical experts) often initially report to the ATO. This approach facilitates the rapid development and standardisation of these skills compared to if they were dispersed throughout the organisation.

Third Design Decision: Define the Roles and Responsibilities of the ATO

Design decision three involves determining the roles and responsibilities of the ATO, which should align with its purpose and mandate. Leaders need to identify the necessary capabilities and skills for the ATO, recognising that its composition may evolve over time. Successful transitions typically require leaders with core competencies across several key roles:

Execution Leaders: Responsible for owning the transformation roadmap, assessing its sustainability, and ensuring continuous value delivery. They possess a blend of business experience and expertise in support functions like HR, finance, and IT. The number and time allocation of these leaders vary throughout the transformation phases.

Methodology Owners: Tasked with gathering insights from the transformation, refining agile practices, and operating models, and establishing consistent standards across the organisation. This role fosters a common understanding of agility and facilitates learning as different parts of the company undergo transformation.

Methodology Owners: Tasked with gathering insights from the transformation, refining agile practices, and operating models, and establishing consistent standards across the organisation. This role fosters a common understanding of agility and facilitates learning as different parts of the company undergo transformation.

Change Management and Communications Experts: Ensure effective communication channels during periods of change, crafting targeted messaging for various stakeholders involved in the transformation.

Transformation Leader: Holds overall responsibility for the ATO's success, typically an executive with a profound understanding of the organisation's dynamics and the external forces influencing it. Key attributes include a proven track record in directing large-scale programs, influencing stakeholders across the organisation, adept communication and coaching skills, and effective prioritisation abilities.

These roles may be structured as either full-time or part-time positions, depending on evolving needs. The ATO must maintain agility in adjusting its size and capabilities to sustain momentum throughout the transformation process.

For instance, an insurance organisation established an ATO to drive grassroots transformation, initially collaborating with various support functions like HR, technology, finance, coaching, and operating-model design. As objectives were met, the ATO gradually reduced its involvement accordingly.

These three design decisions—defining the ATO's purpose and mandate, determining its reporting structure and organisational integration, and outlining its capabilities and roles lay the foundation for effective agile transformation offices. By coaching leaders and evolving practices to meet organisational needs, the ATO facilitates successful

transitions.