Traditional organizations face more challenges moving to agile development than internet or "digital native" companies because they rely on legacy operating models, according to a recent McKinsey podcast.
To get the most out of agile, companies must first update their operating models. Organizations that want to move to agile therefore must modify enterprise-wide processes outside of IT and change the way they think about their technical architecture.
"You really have to take the whole enterprise and become an agile organization as a whole," said McKinsey partner Gerard Speksnijder in the podcast. "We find that the biggest barriers to success are around organizational structure, around how to resource. If you solve for that, then you’re really able to get to agile at scale."
Companies like Amazon and Uber develop products and services fast, then test them, modify them and meet customers’ needs quickly because they don’t have legacy operating models to slow them down.
While startups are more flexible, making it easier to be agile, traditional companies tend to have monolith applications and legacy operating models to slow them down. Part of the problem lies in how large organizations are traditionally structured.
"Creating an end-to-end, self-contained team is tremendously difficult in a large organization," said McKinsey partner Santiago Comella-Dorda and Gerard Speksnijder in the podcast.