Vanguard’s investment in agile pays employee engagement dividends

Having interviewed Vanguard CIO John Marcante, back in 2014, on his approach to leadership development, I was interested to learn how he was evolving his IT organization in the new world of digital technologies.  Before our interview, I knew that agile development, when done right, can increase software output, decrease defects, and ensure tight alignment between technology and business outcomes. But during our conversation, I learned the significant impact that agile can have on employee engagement as well.

But before you hire your agile consultants and start training, cautions Marcante, be sure your technology environment is up to the continuous delivery challenge.

Martha Heller: What have you done to create an engaged IT workforce?

John Marcante: We created a global “New Ways of Working” initiative which the industry would call “agile development.” True agile starts at the top of the organization, and my boss, CEO and chairman, Tim Buckley, has committed to creating an agile organization. We are dedicating ourselves to a culture of outcome-oriented, cross-functional teams that are empowered to test, learn and move fast.

We are also shifting from a project-based to a product-based methodology with a full-time dedicated business expert as product leader. We surround that person with “full stack teams,” who bring together all the capabilities needed to achieve an outcome. The product leader’s role is to guide the team in achieving a business outcome, like increasing the conversion rate of prospects, for example, rather than delivering a project on time. 

In working in a new way, our teams are also leading in a new way. With agile and product management, the role of the leader changes dramatically. In a project model, the leader manages costs, schedules, functionality, and delivery – often in a command and control style – but those days are over. Today’s leaders empower the team, create the right outcomes, and eliminate the barriers, all while improving employee engagement.

Automated continuous delivery is the way people want to develop software. They want to be in cross-functional teams learning from each other. They want to be empowered to drive big outcomes, not to write a certain amount of code by the end of the week. They want to see the benefit of their work and they want to see it quickly.

What advice do you have for CIOs who are driving for new ways of working?

Because people want to work in an environment where they can deliver continuously, you can’t have agile without the right technical infrastructure. You can organize your teams in agile pods and develop software, but if the software sits on the shelf until you can release it, then it’s not continuous delivery. Don’t create a cross-functional team, assign them an outcome, and then say, “Good luck on your quarterly release.” You have to refactor those old applications over time for a continuous delivery cycle.

For years, I have been saying that agile isn’t an IT initiative, it belongs to the entire company.  That’s true, but as CIOs, we need to make sure we build the highways that allow the cars to move really fast. If you’re held up on releases, you’re going to frustrate people, and then IT becomes the roadblock. If you would have asked me years ago, I would have thought the long pole in the tent would be change management; when really, with agile, technology is the long pole.

Agile also requires a commitment to reskilling the organization. Don’t displace all of your loyal people and replace them with people who know agile. I see that over and over again, and it’s a huge mistake; you never get the loyalty or engagement back. We are taking the harder road of transitioning our current organization to agile and reskilling our employees.

You mentioned that you need the right technology to be truly agile. What have you done to modernize your environment?

Beginning in 2014, we made a big bet on cloud technology. We spent a lot of time on cloud architecture before we did anything in the public cloud. Once we had the architecture in place and had selected our public cloud providers, we decided to put all new development in the public cloud.

We now design reusable components, which the industry calls APIs, so that we can easily distribute software around the world to auto-scale our capabilities. Today, two thirds of our development teams are operating in this environment of continuous delivery.  

When we were moving to a continuous delivery model, a board member asked me, “Can you really deploy software this fast and still have quality and security?” The answer is, “Yes, we can.” When you use a continuous delivery pipeline, you can automatically test quality and check for security risks every time a developer modifies software. Instead of the business and IT manually testing software, you can run all functional and regression tests automatically in minutes, not weeks.

Additionally, you can automatically run all of your security checks early in the software development process. That’s better than having a security architect review code multiple times or right before final delivery. In the old world, any security risks identified late in the process could materially delay software delivery to clients! Automated security checks save time and decrease risk.

With automated tests and checks, we have also seen measureable speed of delivery increases. Through August 2019, we have deployed more business functionality than the entire year of 2018. That’s the result of agile, continuous delivery, and product management at scale. 

How do you know your agile program is improving employee engagement?

In 2014, we lagged both internal and external benchmarks in engagement scores, and today, we are ahead on both of those measures. The improvement is the result of creating a culture that emphasizes employee engagement, and allows employees to learn from each other and see the benefits of their work. The fact that we receive a large number of employee referrals is a good measure, too. Our technology employees are encouraging their friends to come work here.