Organizational simplicity. Fast execution. Clear responsibilities. Fluid teams. Agile planning practices. Companies in every field are rushing to make these organizational changes to compete in today’s marketplace. But one industry that has been lagging more than most – heavy industry – is using innovative ideas borrowed from the tech sector to bolster performance and respond to increased environmental rules and the need for further cost savings.
What one global chemical company is doing to create agility in its R&D operation offers an inside look at the beneficial impacts such organizational makeovers trigger for not just this industry, but others as well. The company believed it could speed project execution and save a bundle in the process via its 100-plus member process-improvement R&D team.
Projects that once took months to move from idea to initiation now just take days and, in general, are 75 percent faster. Rapid coaching of the R&D team sparked daily improvements. Delegated decision-making replaced the common “hurry up and wait” culture. A seismic benefit: The first agile R&D team doubled its productivity while – in just five weeks – it identified $150 million in potential annual savings. Since then, identified savings have more than doubled as more R&D teams have made the transition to agile.
Projects that once took months to move from idea to initiation now just take days and, in general, are 75 percent faster.
As the backdrop, most R&D team members were chemical engineers with PhDs who spent much of their time alone in their respective offices. Many knew their plant’s front-end processes but had no clue about its back-end troubles. Interaction with internal business customers – and each other – was inadequate, leading to delays and rework. And their time was split across multiple projects that led to inefficient multitasking and lack of accountability.
The transformation developed through the department leaders, who handpicked team members, making sure the team reflected different age groups and behaviors. Everyone got a brief training on the agile concept.
The team applied Scrum – an agile methodology developed by the tech industry for rapid, iterative software development with a “test and learn” mindset. It adopted one-week “sprints” to identify high-value process improvements in the plants, and each week, it held reviews with internal business customers to iterate end products. Accountability was instilled through complete team ownership of the project and peer pressure. Plus, the team got instant feedback about performance.
This was also essential to meet the team’s personal needs. They were used to working independently with vastly differing schedules. We set a 9 a.m. to 3 p.m. schedule for Monday to Thursday to account for personal needs such as child drop-off and pick-up, and Friday was open for them to handle non-project related work. But importantly, during 9 a.m. to 3 p.m. Monday to Thursday, they were 100 percent dedicated to the Scrum team with no exceptions.
Of course, challenges exist that can stymie success. Principally, leaders and employees must develop new mindsets and capabilities that can differ markedly from before. And leaders must manage on output – defining the goal – rather than input, or giving the task.
Highly agile leaders and teams realize that change is constant and adopting to a turbulent global environment is part of the future. Understanding the realities that organizations need to adapt again and again means having intentional, proactive approaches to change. Continually scanning the organization’s environment, viewing challenges with fresh eyes and a willingness to rethink past assumptions, is the path forward to future success.