Northwestern Mutual – SAFe for Financial Service

“We had been challenged a number of times in changing our underlying CRM platform. After implementing SAFe, our overall effort actually came in $12M less than originally estimated and 18 months sooner than predicted.”

Bryan Kadlec, Director, Client Digital Experience

Challenge:

Market leader Northwestern Mutual sought to apply Lean-Agile practices to remain competitive, though previous efforts had been stymied by a longtime Waterfall culture.

Industry:

Financial Services, Insurance

Solution:

SAFe®

Results:

  • Collection Feature Cycle Time improved 30-50%
  • IT delivers requested capabilities 80-90 % of the time
  • The overall effort on a project came in $12 million less than originally estimated and 18 months sooner than predicted

Best Practices:

  • Support experimentation—Leadership at NWM fostered an environment, and provided resources, to enable this transformation. “Our forward-thinking leadership knew we needed to bring in some changes so they invested in continuous learning and improvement,” Schindler says.
  • Use proxies for offshore teams—NWM pre-plans with offshore teams and then brings proxy representatives to PI planning events.
  • Customize SAFe—NWM increased engagement with its own spin on the program board, with the Transformation Railway Station.

Introduction

In business, staying ahead of the competition inevitably requires taking some risks. But how do you do this, when a key part of your success depends on keeping risk at bay? That’s the question Milwaukee-based Northwestern Mutual (NWM) had to answer while seeking new ways to maintain and build on their 160-year history of helping families and businesses achieve financial security.

To maintain the leadership position NWM has built over nearly 160 years, the organization has taken an innovative, entrepreneurial approach to business. It’s paid off: The past year (2016) was one of the company’s strongest. The company reported record-level revenue ($27.9 billion), was named by FORTUNE® magazine as one of the “World’s Most Admired” life insurance companies, and has maintained the highest financial strength ratings awarded to any U.S. life insurer.*

300-Day Cycles

In 2012, the company reached a turning point. In addition to a company-wide push for continuous learning and improvement, IT needed to move faster.

“It took over 300 days and many instances to deliver value to our customers,” says Jill Schindler, Manager, Client Digital Experience. “We were getting a lot of questions around, ‘Why does it take so long and cost so much?’ We knew we needed to be more flexible, adaptable and responsive, and it didn’t take us long to realize that Agile was a big part of that.”

SAFe for Financial Services

NWM had tried to adopt Lean-Agile practices before, experimenting with a few Scrum teams in the mid-2000s. However, those efforts ran headfirst into a deeply ingrained Waterfall culture.

“We didn’t start with much training or coaching, and teams worked on the aspects they wanted instead of the aspects that we needed,” says Bryan Kadlec, Director, Client Digital Experience. “We fell woefully behind and then were slammed by a waterfall world to put out the fire.”

A Second Attempt at Agile

Northwestern Mutual shelved its Scrum efforts until 2012, when the company embarked on a more methodical approach to Agile. This time, they set out to train as many people as possible. “We wanted to do this and senior leadership believed in it, so we pushed forward,” Schindler says.

At the time, three or four teams experimented with Agile but the organization simply was not set up to accommodate it.

For next steps, they held their first rapid improvement event (Value Stream mapping). The weeklong event brought together Scrum teams and specialized teams with the goal of addressing the challenges of these distinct groups working together. The end result: a better understanding of the problems and a systematic way of approaching them. Key to that was engaging the IT strategy team to help remove barriers.

The Missing Piece

About that time, NWM found the Scaled Agile Framework® (SAFe®) and quickly saw it as the missing piece. “SAFe totally lines up with what we were already trying to do but we just didn’t have a platform for it,” Schindler says. “This was the framework we needed for delivering Agile at scale.”

“In SAFe, we could see Agile and Lean together and had this sense that it was a very powerful thing,” Kadlec adds.

Schindler and Kadlec went back to the leaders or their respective organizations and secured resources to try SAFe—becoming pioneers not just for their own company, but also establishing NWM as the first large company in Wisconsin to take this course. They believed firmly in their chosen path, but it still felt risky to apply new practices to a large chunk of the company’s portfolio.

“It shaved a few years off our lives!” Kadlec quips. “We believed that the path we were taking would deliver high value, but it still felt high risk. But if we’re going to compete, we had to have quicker response time.”

The First Program Increment (PI)

SAFe for Financial Services

Schindler and Kadlec trained as SAFe Program Consultants (SPCs) and additionally tapped Al Shalloway, CEO, Net Objectives, along with SAFe Fellow Jennifer Fawcett to facilitate the company’s first PI planning event. NWM asked 270 people to come together for the first two-day event—in January in Wisconsin—where they launched their first four Agile Release Trains (ARTs).

The response was heartening. People were engaged and ultimately on board. “At the end of the day, we felt a huge sense of accomplishment,” Schindler says. “Everyone understood what was expected of them.” Northwestern went on to train as many people as possible. In fact, for some team members, training was the first sprint.

Making the shift in the company’s longtime waterfall culture wasn’t easy. Coaching was key, especially at the beginning. As teams went through cycles of Plan, Do, Check and Adjust, old behaviors would emerge—and need to be addressed. In truth, some individuals chose to leave—but most chose to dedicate themselves to the new way of working. The “new era” behaviors the Agile mindset fosters have taken such a firm hold companywide that they are now a factor in performance reviews.

By the second PI event, again with Fawcett facilitating, Release Train Engineers had a sense of ownership.

Transformation Railway Station

Northwestern Mutual took a clever twist on the ART program board, dubbing it Transformation Railway Station. On its board, a tunnel image represents the funnel of new work/ideas and cows represent impediments. The former is particularly apt given that, in 1859, two policy owners were killed when a train hit a cow and derailed. When the new company lacked the full funds to pay out those first life insurance claims (for $3500), NWM’s president at the time personally borrowed the funds.

On the board, laminated trains make their way along the track (the Portfolio level) from the departure station through various stages:

  • Identify—Communicate change vision, and determine Value Stream, ARTs, scope, PI planning date and training
  • Prep—Perform SAFe training
  • Launch—Conduct final prep and first PI planning event
  • Mature—Coach and develop the ART
  • Inspect and Adapt—Hold Inspect and Adapt workshop, plus second PI planning event
  • Aftercare—Complete coach strength, weakness, opportunity and threats (SWOT) assessment; discuss future coaching engagement

Through the PI, all parties keep a close watch on progress and metrics. “Leadership can walk up and know where we are at any time,” says Sarah Scott, Agile Lean Organization Coach at Northwestern Mutual.

SAFe for Financial Services
Transformation Railway Station

Cycle Time Improvement

Since deploying SAFe, and beginning its first earnest Agile efforts, Northwestern Mutual reduced Collection Feature Cycle Time by 30-50%. And surveys of business representatives indicate that IT delivers what they requested 80-90 percent of the time.

Ultimately, the changes affected the bottom-line—for the better. “After implementing SAFe, our overall effort actually came in $12 million less than originally estimated and 18 months sooner than predicted,” Kadlec says.

Now in year three, with 12 PIs behind them, the company has five SAFe instances and 14 ARTs in progress across a wide range of product areas. Northwestern Mutual provides leadership for SAFe in Wisconsin, even hosting a Scaling Agile Meetup Group that draws as many as 300 attendees to its monthly gatherings.

“We’re at a tipping point now, continuing to break down barriers,” Schindler says. “The whole organization is in the heart of a major transformation and we’re leveraging SAFe to accelerate our Lean-Agile IT transformation. We’re at a whole other level that I don’t think would have happened as quickly or with as much impact if we’d just had a handful of Scrum teams.”

* Ratings are for The Northwestern Mutual Life Insurance Company and Northwestern Long Term Care Insurance Company, as of the most recent review and report by each rating agency. Northwestern Mutual’s ratings: A.M. Best Company A++ (highest), 5/2016; Fitch Ratings AAA (highest), 11/2016; Moody’s Investors Service Aaa (highest), 1/2017; Standard & Poor’s AA+ (second highest), 6/2016. Ratings are subject to change.

Northwestern Mutual is the marketing name for The Northwestern Mutual Life Insurance Company (NWM), Milwaukee, WI and its subsidiaries.

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Suggested Case Study: Fannie Mae

AstraZeneca – SAFe for Agile Adoption

AstraZeneca - SAFe for Agile Adoption

“We’re delivering faster with greater quality and less manpower—resulting in substantial financial benefits from the teams that have adopted Agile to date. We expect to double our adoption of Agile this year.”

Patty Sheehan, AZ Agile Cultural Change Lead and Coach

Challenge:

Scale Agile practices across a large global change portfolio

Industry:

Pharmaceutical

Results:

  • Substantial financial benefits delivered in the first year
  • Significantly faster time-to-value delivery
  • Reduced team sizes
  • Improved quality of outputs over previous solutions

Best Practices:

  • Address culture change – AZ focused on the culture shift required to support Agile by creating Culture Leaders.
  • Align governance and procurement – AZ aligned funding and governance approval with Agile ways of working, enabling teams to make progress quickly and benefit from Agile delivery.
  • Consider face-to-face ARTs – AZ required face-to-face planning at the launch of a new Agile Release Train (ART).
  • Stay organized – AZ used task tracking and collaboration tools extensively.

Introduction

AstraZeneca (AZ) is a global, science-led biopharmaceutical business employing 61,500 employees worldwide. Millions of patients around the globe use its innovative medicines. AZ activities span the entire life cycle of a medicine, from research and development to manufacturing and supply to the global sales and marketing of primary care and speciality care medicines that transform lives.

SAFe for Agile Adoption

AZ teams are pushing the boundaries of science to make a difference through medicine for patients, their families, our stakeholders, and society in general. AZ believes that scientific research and applying leading technology are key to achieving cutting-edge innovation and at the heart of what we do.

In AZ, IT is helping to push the boundaries of science to deliver life-changing medicines by continuously improving the IT environment and working with business teams to innovate for competitive advantage.

Enterprise-wide Alignment with Agile

AZ has made use of Agile practices for a number of years at small scale, but up to 2014 had continued to deliver the majority of its programs using traditional approaches. A decision was taken to adopt Agile methods more broadly across its IT change portfolio in order to bring about a step change in delivery performance. PA Consulting was selected by AZ to support this transformation effort, providing organizational change management expertise, Agile transformation strategy, training and coaching. AstraZeneca and PA Consulting selected the Scaled Agile Framework® (SAFe®) in late 2014 as the framework to be applied to support the adoption of Agile.

“We needed the ability to scale Agile quickly because we run large, complex programs at AstraZeneca,” says Patty Sheehan, AZ Agile Cultural Change Lead and Coach. “SAFe is a flexible yet robust framework that has already been proven successful. It has been the right fit for us.”

The SAFe Agile adoption approach focused on organization and culture change, supporting Agile teams directly and ensuring that processes such as procurement and regulatory approval were aligned with Agile. The Agile adoption has so far been extremely successful with teams reporting significantly faster time to value delivery (40-60%), reduced team sizes (cost reduction of 25-40%) and improved quality. Financially, we rigorously monetized a large proportion of benefits from just a small subset of teams.

The AZ team, supported by PA Consulting, rolled out SAFe in the first year to tackle the larger scale programs in its portfolio, focusing on three key areas:

  • Organization and culture change:
    The transition to Agile ways of working can be a substantial break with traditional corporate culture. AZ defined five key organizational values: customer focus, technical leadership, operational excellence, collaboration and simplicity. By becoming Agile, AZ people would not only know these values but practice them in a methodical way.AZ tied this message into an Agile vision statement and marketing, making the change feel more personal and organic. The culture change approach included creating an extensive network of Agile Culture Leaders across the organization, focused on executive-level buy-in. The company also dedicated additional time at the end of each SAFe training course to the discussion and diagnosis of immediate actions to change culture.
SAFe for Agile Adoption
Figure 1 – The different layers of the AZ Agile change network, from practitioners at the center, supported by the Agile COE, Agile Culture Leaders and Leadership.
  • Alignment of governance, procurement and regulatory processes with SAFe:
    AZ replaced its traditional project governance framework with a new Adaptive Delivery Framework that was easy to use, lightweight, and crucially, supported both Scrum and Scaled Agile approaches out of the box. With this change, funding and governance approval were aligned with Agile ways of working, enabling teams to make progress quickly and benefit from Agile delivery. As a regulated pharmaceutical organization, AZ also has many regulatory obligations on its systems and processes. Defining an approach with the internal Quality Management group was a key success criteria, allowing the AZ Agile teams to deliver validated software solutions that supported regulatory requirements.
SAFe for Agile Adoption
Figure 2 – AstraZeneca’s Adaptive Delivery Framework, showing the lightweight governance that is applied to Scrum and Scaled Agile teams.
  • Outsourced and offshore teams:
    AZ teams are typically made up of a number of different third-party suppliers working in collaboration with AZ from a variety of sites around the world. We overcame the challenges inherent in this arrangement, building on key elements of SAFe to support this way of working. The PI Planning event was crucial to the alignment and co-ordination of large, off-shore teams. These events were carried out using a mixture of on-site and video conferencing facilities, with a requirement for face-to-face planning at the launch of a new ART. Similarly, iteration alignment and system demos helped the teams to maintain visible synchronization throughout increments. The Legal and Procurement teams at AZ are revising the contractual arrangements and procurement processes to align with SAFe. Task tracking and collaboration tools were used extensively. Following the success of the Agile adoption in the first year, AstraZeneca is now creating a number of internal ARTs to deliver change, again utilizing a multi-site model.

Value Delivered in Year One

AstraZeneca is 18 months into a multi-year transition to Agile ways of working, but with the adoption of the Scaled Agile Framework and the support of PA Consulting, a substantial transformation has already occurred. Twenty large teams have adopted Agile, and over 1000 staff have been trained and supported through a robust coaching regime. More importantly, Agile maturity has increased rapidly over the year with strong adoption in each area of the business. The teams adopting SAFe have observed significantly increased time to value delivery with improved quality of the outputs over previous solutions. This has been achieved more efficiently with reduced team sizes

“We’re delivering faster with greater quality and less manpower—resulting in substantial financial benefits from the teams that have adopted Agile to date,” Sheehan says. “We expect to double our adoption of Agile this year.”

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Suggested Case Study: Royal Philips

Telstra

Telstra - SAFe Telcom

Industry:

Telecommunications

Overview

Telstra is Australia’s leading provider of mobile phones, mobile devices, home phones and broadband internet. When Telstra’s Enterprise Data Warehouse delivery team began their Agile journey, they scaled from 1 to 5 teams in a matter of months and found themselves struggling to make the leap from agile projects to an Agile program. “After reading Dean Leffingwell’s Scaling Software Agility and Agile Software Requirements,” notes Mark Richards (Agile Coach) and Em Campbell-Pretty (General Manager, EDW Delivery), “we were inspired to establish Telstra’s first Agile Release Train.” Later, they both followed up with SPC certification to further enhance their knowledge and skills.

Telstra - SAFe Telcom

This presentation, from Agile Australia 2013 in June, covers how SAFe provided a recipe for success, reflecting on how Telstra translated Program-level SAFe theory into practice, transforming not only the delivery capability of the EDW team, but also the culture. Adopting Leffingwell’s Scaled Agile Framework, the Theory and the Practice.

Most importantly, they are getting great business results, including:

  • Average delivery cycle time down from 12 month to 3 months
  • 6X increased in delivery frequency
  • 50% cost to deliver reduction
  • 95% decrease in product defects
  • 100% projects delivered on time and on budget
  • Happy project sponsors
  • Happy teams

As we noted, Em and Mark placed an early emphasis on rapidly evolving the culture that supports Lean-Agile development, and they had some fun with it too, as you can see if you check out the The Power of Haka! on Em’s PrettyAgile blog.

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Telia Finland