E.ON recognized the need to change how it works to adapt to the demands and constraints of a rapidly changing market. Introducing such a level of innovation is not natural for a traditional multinational company with a history of almost a century, and perhaps deserves even greater appreciation. The agile case study shows how E.ON embarked on its transformation journey and how agile communities were able to support this change.
Starting the agile journey
The transformation started with the IT department in 2011. The main objectives were to improve the effectiveness and efficiency of projects and to reduce costs. It became clear that a completely new, holistic approach was needed, rather than a focus on one specific area. Dave White and Meggie Revesjö, Agile coaches, took advantage of the openness to change and together tried to embed the wider use of Agile tools in the corporate culture. They started small, knowing that in such a large company, a transformation on this scale would not happen overnight. As a first step, they found an enthusiastic sponsor in Munich, and from there they were able to campaign for change with more conviction in the company, and the first Scrum teams were established in Munich. The belief that only young companies like Google and Spotify were capable of adopting agile operations was challenged.
Main findings of the Agile case study
Overcoming the fear of change was only possible by presenting factual evidence and quantified results. And because of this transparency was key to achieving breakthroughs. Agility helped to cut around 25% of the planned costs. The initial successes have allowed continuing the training; coaching and sharing success stories have attracted the attention of many investors and senior managers.
Dave looked for opportunities where the introduction of agility could deliver significant results. E.ON's Spanish sector was focused on improving customer satisfaction. Dave traveled to Madrid and assured local management that he would be able to deliver quantifiable results within two months. Not only had he made progress, but within three months he had achieved an increase of over 90% in a project where the time to achieve this result was estimated at over two years. The Marketing Manager was so impressed with their results that he was ready to give up the waterfall methodology immediately. Confidence in agility was naturally built by Dave and Meggie connecting the "newly converted" colleagues with additional sponsors while they developed the team's competencies, part of which included working with the Agile Business Consortium. The coaches were enthusiastic about the many useful resources on agile published on the Consortium's website, and the valuable exchange of experience and networking opportunities within the Consortium community.
By 2013, a number of agile communities had been established within E.ON: in Germany, the UK, Sweden, and Spain, with Hungary joining in 2019. All internal training is led by 12 agile coaches who have already trained around 5,000 people within the company.
Some vital lessons have also been learned during the transformation: agile communities should never be transformed into top-down groups but should operate free from traditional corporate structures and processes. This allows employees to share their problems with their coach and teammates while remaining loyal to the company and not having to involve their superiors in the process but discussing issues such as sponsorship communication or prioritization with peers. "Corporate agility is the opposite of bureaucracy and cannot be created from a pyramid structure."
With more than 400 members, Agile Communities have become a key learning hub for E.ON's corporate agility. Members meet regularly and most of them participate in the annual agile conference. Dave and Meggie's goal for E.ON's transition to agile wasn’t to stick to the IT sector, but to embed agile methodology throughout the organization, rather than making small changes, extending it to the entire project lifecycle. It's easy for different departments to become silos, such as a marketing department that uses customer relationship experts to get to know customers rather than contacting its own call center.
"When you look at the whole customer-company relationship, who do you ultimately hold responsible for customer satisfaction, marketing or sales? We need to break down the walls between departments so that colleagues in different departments can work together and solve problems more effectively." said Dave White, Agile coach.
To do this, Dave and Meggie worked with colleagues who organized events for all departments in the company, responsible for setting up corporate values. The aim was to help employees better understand the roles of the company's different departments and to be able to see the company's processes in terms of customer satisfaction, rather than just being absorbed in their own areas. Two teams have been set up to support the transformation from different perspectives. One is called. "New Way of Working Community", which was trying to make an impact on the business and corporate values, and the "Design Tribe Community", which was trying to introduce different techniques for innovation and improving the customer experience.
"We started with projects, then moved to programs, and finally worked with portfolios, organizational structures, and roles. Our current goal is to organize processes in a more data-driven way, with short investment cycles aligned to the currently defined corporate values and a value framework set up according to the principles of ATDD (Acceptance Test Driven Development). This would allow us to quantify the expected success rate before the delivery cycle, and after examining it, to make an empirical decision: do we overhaul the current processes and change or stick with the old best practices?"- Dave White, Agile coach.
Agile case study background
E.ON is a multinational company with 43,000 employees, serving approximately 22 million energy and gas customers over a 980,000 km area. Today, the energy industry is facing unprecedented challenges and changes. Based in Essen, Germany, the privately owned international energy provider's main goal is to ensure that as many energy customers as possible choose E.ON's services.