Business agility in a changing world

October 2016Dave White and Sébastien BonicelAgile Coaches @ EON

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540,000 tons of livestock manure per year into21 million cubic metres of biomethane

The Power of Poo – Denmark’s largest biogas plant

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Transforming E.ON into an agile Business is a journey of a thousand steps,

but it all starts with the first one.

Revolution through evolution

Small Agile Tests and Pilots

Run someAgile-Like Projects

Run someReal-Agile Projects

Continuous Delivery@ portfolio Level

Scaled Agile Framework(AM – Enh. – Roadmap)

2011Draft Scrum-like

framework developed

UK trialling training approach

2010First executive sponsor

identified

First agile community in Berlin

Self-contained Pilot projects in

Germany and UK

2013Spain goes Scrum

25% of projects using agile-like framework

Engagement with local agile coaches

Programme level agile delivery

2014New EON vision

DevOps initiative starts

First scaled agile project across countries

Test automation starts

Initiate Portfolio value-driven

work

2015Remodelling supplier contracts

Reworking internal processes to Lean approach

Upskilling agile coaches

Culture change initiative

The most Innovative (100Koll), Complex and

Business Disruptive initiatives run Agile.

Power in numbers – starting small fires

2010 2011 2012 2013 2014 2015

TRAINING AND COACHING

10 25 125 220 350 500+

2016 – an explosion of Agility

Culture

Organisation

Practices

Leadership

Agile Management

Traditional Management

• Focuses on 100% utilisation of ’my resources’

• Recruit unique skillsets resources

• Micro-manages individuals/teams• Wants to be part of the team• Motivates individuals

• ”Are we on schedule and on budget?”

• Costs, quality, time as KPIs • Decisions by committee

• Organisational change is a consequence

• Manager of others’s thoughts• Improve when needed

Agile Management

• Focuses on enabling the right people to increase throughput

• Recruits T-shape people

• Enables the team to becomeautonomous

• Is the protector of the team• Motivates the team

• “What is the best investment now?”

• Value, Quality and Flow as KPIs • Decisions by exceptions

• Organisational change is part ofthe lean thinking

• Thought leader• Continuously improve/life long

learning

Practices (& tools)

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Keep VPA at Portfolio level to

drive Flexibility

… so we group Projects onto Programs to

realize Business Cases

Setup a series of mixed business and IT

Communities(e.g. Business Analysts)

lead by competence on the subjects

…and This drops walls between IT and business with

Shared Responsibilities

… here we prioritizebusiness needs across programs through a

Master Backlog

…then we dispatch

Priorities to eTribes!

…eTribes are teams of subteams working on E2Ebusiness domains…

…it’s a mixed team of business and IT and

acting as Agile Start-Ups

…ultimately serving more programs and acting as

Business Start-Ups

Delivery Approach

Scrum teams

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Product or Programme Teams

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Investment themes drive programmes or products

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KPIs: Cycle Time and Value

Scaled to a Business Unit

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Decentralised, collaborative investment/budgeting

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BA/Architect Communities spot & resolve dependencies & conflicts at Epic and Story level

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Use appropriate planning horizons for flexibility

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Business agility examples

100Koll (SW)

Virtual Power Plant (DE)

100Koll – Internet of things @

Market Megatrends• New Social Structures• The rise of Individuals• On the Move • Intelligence & Innovation• Global Connectedness• Environmentalism• Shift in Resource Availability• Economic Power Shift

Technology Trends

• Cloud• Digitalization• Agility• Big Data• Open Source• Smart World and IoT• Near-shore• Etc.

Internal Forces

• New Strategy • New products andBusiness Models

• Re-organisation (2014-2015)

… the Unexpected

The things that we do not know we don’t know…

Which way Next?

A new portfolio of products

100Koll – Internet of things @

A trial

Single product, one proposition, 6 months

project

Assumptions

• Customers are interested

• Customer have a need• EON will be trusted in this new market for us

• Price level is right• EON can do this (brand new everything)

Post-launch learnings

• Niche group of customers are interested

• Product too complex• Price ok• EON cannot do this on their own

• Finding good partners is hard

• Trial was too long

Iteration 2

Single product, 2 propositions, multiple

devices, 5 months project

Assumptions

• Include more mobile devices will make the proposition more versatile

• 2 Price levels gives choice

• New Partner will make it easier

• The Business proposition is strategic but not aggressivePost-launch learnings

• We have not applied the learnings from the Iteration 1

• Product still too complex

• Customers do want it• EON brand is improved by this portfolio

• Start smaller, think big

Iteration 3

Bundle 100Koll with Electricity, radical e2e business impacts, 6

month project

Assumptions

• Multiple business areas will work using agile principles

• EON will unite in this project

• Customers do want the proposition (target groups are correct)

• Price is right

Post-launch learnings

• OMG! This is hard• Yes, customers do want this

• Target groups are right• Build up volume over time

• Do not overestimate business value but validate it asap

The Virtual Power Plant

• Aggregates decentral energy producers and consumers• Stabilizes the grid via intelligent steering of the assets

Control & Aggregation IT

Flexibility/VPP business supports its customers in creating value out of the flexibility of their assets

Accessible Value Pools

VPP Business

Flexibility sources

Make assets available & flexible Manage Flexibility Market Accessibility

On site generation

Controllable loads

Energy storage

Flexibility sources

Aggregated operation

Selling energy and/or capacity

Providing reserve

Helping TSOs/DSOs

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Kicked off full Agile “SCRUM” work with business and developers in 2015 : a fast and dynamic software delivery and

integration into the E.ON landscape the set up of stable processes (for asset

connection, prequalification and monitoring) a customer centric development (from sales to

operations) resulting in the signing of numerous customers

SCRUM team @ ECT in Essen

Foundation for processing of real-time data:Used by companies like LinkedIn, Uber, Facebook

The in-house agile developed software positions E.ON as pioneer in customer-centric energy services

Set-up across business & IT Technology

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Case study: RW Silicium

15 MW“Demand Response” up to

ECT solution Identify demand response capacity of the furnaces,

and connect them to ECT’s VPP engine Pre-qualify capacity Market demand response capacity to TSO and

dispatch loads whenever requested

CustomerGerman producer of metallurgical silicon operating four electric arc furnaces with a nominal capacity of56 MW

29 MWsecondary balancing power

ECT achievementsMonetize RW Silicium’scontrollable loads.

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It’s SLOW and FRUSTRATING unless you have a really active senior sponsor

The biggest sceptics become the strongest advocates but you need facts and courage to convince them (Ted ‘lone Nut’)

Don’t flog a dead horse. There are plenty who want to run. Pick your battles

Training is not enough. You need hands-on coaching

What we do well

Bring the leaders in the pictureto remove obstacles

Developing the vision (the EON agile manifesto)

Starting small fires and bringing them together

Finding passionate people and giving them space to push. Grass roots rock.

Changing the core KPIs toforce new habits (eg valuefocus)

Procurement contracts tofocus on value not just cost

Use system thinking toencourage multi-layercollaboration

IT is still seen as a service provider, not a partner. Openthe walls. Become an innovator

What we will do next

”No methodology is a substitute for thinking”- Barry Evans

Take all the great ideas, think, experiment and create YOUR framework

david.a.white@eon.com

sebastien.bonicel@eon.com