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As business models across industries are destabilized by disruptive threats, organizations are searching for effective ways to manage their digital projects to deliver the highest value outcomes. Agile methodologies that were originally used in software development are increasingly being applied to cross-functional projects such as e-commerce websites and mobile apps.1
While there has been progress, barriers remain, particularly in cases where companies try to coordinate multiple agile projects simultaneously and scale them across the organization. Although some managers are attempting to move beyond linear development processes in hopes of completing projects faster, most are working in siloes, with little or no interaction or cross-fertilization with other groups. The result is that there’s little opportunity for sharing best practices across functions, divisions, and regions.
In studying agile approaches over the past three years through interviews at more than 50 companies and surveys at more than 100 companies, we found that the organizations that achieve the most success with digital projects use processes that allow for continuous learning and that support critical business goals. For starters, they try to ensure that teams are working on the right problems to address the needs of customers, business units, and other stakeholders. This requires designing prototypes to test key assumptions and value propositions. These organizations also create experiments to collect meaningful data from their customers and other stakeholders so that they can learn what works before pivoting and iterating to develop good solutions. Finally, they pitch their findings and ideas to internal business leaders who are able to provide the resources, including funding and staff, to take the most promising ideas to market. With everyone following those same processes — we summarize the system as prototype, pivot, and pitch — organizations are better equipped to juggle multiple projects at the same time and reap the benefits of scale.
Over the past few years, Johnson & Johnson, one of the organizations we studied, has employed this approach. Individual groups found it so effective that the company’s technology organization created a centralized team that provides dedicated counsel and support related to digital projects. Known internally as rapidValueRealization, it is made up of nine individuals who conduct training and workshops on agile processes and tools that assist IT and business-side employees in managing and scaling digital projects. In this article, we describe how Johnson & Johnson does this and the benefits and challenges the approach brings.
1. Prototyping to key in on the right problems. In developing digital solutions, internal teams are trained to engage with business leaders across the company at the prototyping stage to understand their needs. The agile expert group onboards digital teams at the beginning of their project and practices the necessary skills with them. Integral to the process are simulation exercises designed to help employees become comfortable with testing assumptions and risking being wrong. In one of the exercises, small teams work together building an imaginary town with Lego bricks. The teams gain experience interacting with various stakeholders such as town planners, investors, and residents to understand their needs and prototype ideas.
The exercise encourages employees to overcome functional biases and show respect for colleagues with skill sets, perspectives, and experiences that are different from their own. A strong sense of team building comes from being aware of each team member’s contribution toward the common goal of designing the future town.
Digital teams are also trained to resist embracing solutions too quickly and to examine customer problems from multiple directions. In a popular design exercise known as Crazy 8s, teams are given a problem — for example, how to present user instructions for a new medical device — and individuals get a fixed amount of time to sketch and label eight variations on how to approach it. Then each team member shares his or her ideas with the group. The goal is to generate as many diverse ideas as possible, and then the team discusses how to narrow down the list to the most compelling suggestions. From there, the team votes on which ones are worth prototyping. Such exercises give team members experience in rapidly conceiving and building low-cost prototypes and identifying potential pain points.
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Management has found that digital teams sometimes select the “latest and greatest” solution even if it’s not a perfect fit, or they jump into solutions without fully understanding the customer data. A recent experience involving one of the company’s skin-care product groups highlights this tendency. A cross-functional team was having difficulty understanding the motivations and challenges for getting consumers to reapply sunscreen — a critical requirement for the mobile app that was supposed to address this problem. Initially, the team focused on the functional and technical aspects of the app. An “aha” moment occurred when team members took a step backward and asked a series of “How might we…?” questions, including: How might we make the process easier for parents? How might we incentivize children to reapply sunscreen? And how might we design an app that helps with this and makes it fun?
The questions pushed the team to probe more deeply into the user experience for both parents and children, and to deconstruct the problem into smaller pieces before reassembling them into areas of focus for prototyping and testing. This led the team to prototype different user experiences, including immersive technologies available on smartphones, such as augmented and virtual reality applications.
2. Pivoting to find better solutions. Once a prototype has been launched and refined, teams can begin testing critical hypotheses about the solution’s benefits. The goal is to learn how to improve the user experience and to assess whether the offering can achieve the desired user behaviors and business outcomes. If not, the team can pivot or redirect the project.
Johnson & Johnson’s recent experience with its Vision Pro website for eye care professionals provides a good example of what this entails. The Vision Pro team set out to develop a digital hub for eye care professionals who didn’t like having to order different vision care products from different sites. The team ran an experiment to determine user needs and found that a system that let people order all of their products from a single site would be very popular. However, the most useful insight was learning that, over and above the ability to order products, eye care professionals wanted the hub to provide information that advised them on which products were best suited to treat their patients. In light of this information, the Vision Pro team adjusted its approach, and the results from the new site have turned out better than expected: Site traffic and orders have exceeded the company’s goals, call center issues have dropped dramatically, and more than 80% of site visitors take advantage of the product training materials.
Because designing new digital solutions can be costly, organizations need to be mindful of the business and revenue implications of different options. Indeed, just because it’s possible to build a cool app doesn’t mean it will add value or that you should do it right now. For example, the company’s Vision team wanted to grow its contact lens business through subscriptions, by getting people to sign up for recurring shipments through their eye doctor. However, this was easier said than done; many consumers resisted at first, thinking they could get better deals elsewhere.
At a workshop, the digital team focused on eye care decided to test a discounted subscription offer through doctors’ offices: three months of free lenses to patients who signed up for a one-year subscription. But the team members decided to hold off on investing in an app until they had a clearer idea of whether people were interested. Then, when they received a positive response from patients, they developed an app that has allowed the company to expand the program to scale.
3. Pitching to potential backers for additional resources. Because consumers expect technology solutions to become better and better, digital projects must continuously evolve. Typically, there are ongoing requirements for new people, technology, and financial resources. Yet the governance models at most companies are still based on an annual budgeting process, resulting in a mismatch on timing and needs. What’s different today is that in order to scale digital projects effectively, teams need to become adept at pitching their project resource needs to internal sponsors who can respond quickly. Rather than focusing only on ROI, teams need to use a variety of performance metrics to show how the approach works and how it delivers value.
There are no all-purpose metrics appropriate for every project, but user engagement metrics are generally well suited for early-stage projects. Leading indicators such as average minutes per session, click-thrus, number of messages and chats, and positive ratings can demonstrate whether a prototype is well received and additional funding is warranted.
Digital solutions related to consumer health need to demonstrate low risk and high potential for success, and teams must show how they can differentiate these offerings in the marketplace. For example, the company’s consumer team made the case that its over-the-counter allergy medicine could deliver better outcomes and customer engagement if there were an app that offered patients geographically specific information about the types of allergens circulating in the environment.
To obtain funding for developing an app that would feature this type of personalization, the team put together user engagement and product market data showing that the app would lead to higher revenue and better customer retention. The projections convinced the company to invest in the project.
Requiring teams to pitch a project’s value can help companies manage their digital project portfolios more effectively. Even if an idea or prototype seems promising, managers might decide other projects are better aligned with the corporate strategy or have bigger financial upsides. In Johnson & Johnson’s medical devices group, for example, the biosurgery design team recently explored developing new surgical training solutions for mid-career surgeons that used virtual reality and augmented reality through headphones and iPads. While the early response to prototypes was promising, when putting together a pitch to potential funders, the design team realized that the development costs were high relative to the expected benefits. So the team circled back to the initial question: What could the company do to help surgeons understand and deliver treatments? This led the team to focus resources on simpler solutions.
Since 2015, Johnson & Johnson’s agile project experts have conducted more than 300 training sessions and workshops at 52 locations in 16 countries. In 2018 alone, the group worked with more than 100 project teams across the organization. The company believes the most important success factor to scale agile methods is the willingness of employees to experiment and pursue continuous learning. This is reflected in its 2018 digital agile initiatives: 58 projects involved experiments, and 62 projects involved pivots.
The company’s digital agile initiatives have also shaped its culture. The agile expert group has trained more than 1,000 employees. An internal study shows that knowledge of agile methods by those attending workshops increased by 58%. Some 60% of the projects have been initiated by business-side employees, and 12% of the workshops have now been run by business leaders who previously attended a workshop and are thus championing this effort.
Scaling digital projects is a complex undertaking. It requires a significant amount of hands-on training to give people the right mindset and skills to apply agile methodologies effectively. However, we have found that companies that take this approach in a coherent, organized way are generating value for multiple stakeholders. Business sponsors of agile projects receive high-quality solutions that directly address customer needs. There is a tighter alignment between digital and business strategy, as continuous investments in projects are made only when there is transparent and proven value to the business and its customers. This is particularly relevant as the marketplace changes. Finally, having a consistent approach to doing agile results in digital team members working more effectively together. Empowering teams to take risks, experiment, and continuously learn often results in more satisfied digital team members.
1. J. Birkinshaw, “What to Expect From Agile,” MIT Sloan Management Review 58, no. 2 (winter 2018): 39-42; and VersionOne, “The 11th Annual State of Agile Report,” April 6, 2017.