Flevy Management Insights Q&A
How can executives ensure alignment between Scrum teams and corporate strategy?
     David Tang    |    Scrum


This article provides a detailed response to: How can executives ensure alignment between Scrum teams and corporate strategy? For a comprehensive understanding of Scrum, we also include relevant case studies for further reading and links to Scrum best practice resources.

TLDR Executives can align Scrum teams with corporate strategy through Strategic Planning and Agile Framework Integration, Performance Management and Incentives alignment, and by fostering effective Communication and Leadership, ensuring organizational goals are met.

Reading time: 5 minutes

Before we begin, let's review some important management concepts, as they related to this question.

What does Strategic Planning and Agile Framework Integration mean?
What does Performance Management and Incentives mean?
What does Communication and Leadership mean?


Ensuring alignment between Scrum teams and corporate strategy is crucial for the successful execution of strategic initiatives. This alignment ensures that the organization's strategic objectives are translated into actionable tasks and projects that Scrum teams can execute, leading to the realization of the organization's goals. There are several specific, detailed, and actionable insights that executives can implement to achieve this alignment.

Strategic Planning and Agile Framework Integration

Integrating strategic planning processes with Agile frameworks is the first step towards ensuring alignment. This involves embedding the organization's strategic objectives into the product backlog and Sprint Planning sessions. A study by McKinsey highlighted the importance of aligning Agile teams with business strategy to achieve operational excellence and faster time-to-market. By doing so, Scrum teams have a clear understanding of how their work contributes to the organization's larger goals. Executives should facilitate workshops and regular strategy alignment sessions to ensure that Scrum teams are not only aware of the strategic objectives but also understand their role in achieving them. This can involve the use of tools and techniques such as Objectives and Key Results (OKRs) to set and communicate strategic goals at every level of the organization.

Moreover, executives should ensure that Product Owners are well-versed in both the strategic vision of the organization and the Agile methodology. This enables them to prioritize the product backlog effectively, ensuring that the most impactful items that align with the strategic goals are delivered first. Regularly reviewing and adjusting the product backlog to reflect changes in strategic direction is also essential for maintaining alignment.

Finally, incorporating strategic goals into the definition of "Done" for Scrum teams ensures that deliverables not only meet quality standards but also contribute to strategic objectives. This requires a close collaboration between the Scrum teams and the strategic planning department to define criteria that reflect both operational excellence and strategic alignment.

Are you familiar with Flevy? We are you shortcut to immediate value.
Flevy provides business best practices—the same as those produced by top-tier consulting firms and used by Fortune 100 companies. Our best practice business frameworks, financial models, and templates are of the same caliber as those produced by top-tier management consulting firms, like McKinsey, BCG, Bain, Deloitte, and Accenture. Most were developed by seasoned executives and consultants with 20+ years of experience.

Trusted by over 10,000+ Client Organizations
Since 2012, we have provided best practices to over 10,000 businesses and organizations of all sizes, from startups and small businesses to the Fortune 100, in over 130 countries.
AT&T GE Cisco Intel IBM Coke Dell Toyota HP Nike Samsung Microsoft Astrazeneca JP Morgan KPMG Walgreens Walmart 3M Kaiser Oracle SAP Google E&Y Volvo Bosch Merck Fedex Shell Amgen Eli Lilly Roche AIG Abbott Amazon PwC T-Mobile Broadcom Bayer Pearson Titleist ConEd Pfizer NTT Data Schwab

Performance Management and Incentives

Aligning incentives and performance management systems with strategic objectives is critical to motivating Scrum teams to work towards corporate goals. According to a report by Deloitte, organizations that align their reward systems with their strategic priorities are more likely to achieve those priorities. This involves setting Key Performance Indicators (KPIs) that are directly linked to strategic objectives and measuring individual and team performance against these KPIs. Executives should ensure that these KPIs are communicated effectively to all members of the Scrum teams, making the connection between their daily work and the organization's strategic goals clear.

Furthermore, adopting a balanced scorecard approach can help in evaluating performance from multiple perspectives, including financial, customer, internal business processes, and learning and growth, ensuring a holistic alignment with strategic objectives. This approach encourages Scrum teams to not only focus on short-term deliverables but also on long-term strategic goals.

In addition, providing training and development opportunities that align with both the strategic direction of the organization and the personal growth goals of the team members can further enhance motivation and commitment. This ensures that the organization's workforce is not only skilled in Agile methodologies but also aligned with the strategic vision, driving towards common goals.

Communication and Leadership

Effective communication and leadership are pivotal in aligning Scrum teams with corporate strategy. Leaders play a crucial role in translating the organization's vision into actionable insights for Scrum teams. This involves clear, consistent, and transparent communication about strategic objectives, changes in direction, and the rationale behind these changes. A study by PwC found that organizations with effective communication practices are 3.5 times more likely to outperform their peers. Leaders should adopt an open-door policy, encouraging feedback and discussions about strategic alignment and ensuring that team members feel valued and heard.

Leadership training programs that focus on strategic thinking, communication skills, and Agile leadership principles can equip leaders with the tools they need to effectively guide their teams towards strategic objectives. This includes fostering a culture of innovation, where team members are encouraged to contribute ideas that align with strategic goals.

Finally, celebrating successes and learning from failures within the context of strategic objectives can reinforce the importance of alignment. Recognizing and rewarding teams and individuals who make significant contributions to strategic goals can boost morale and encourage a culture of excellence and alignment.

In conclusion, aligning Scrum teams with corporate strategy requires a multifaceted approach that integrates strategic planning with Agile frameworks, aligns performance management systems with strategic objectives, and emphasizes effective communication and leadership. By implementing these strategies, executives can ensure that their organizations are well-positioned to achieve their strategic goals.

Best Practices in Scrum

Here are best practices relevant to Scrum from the Flevy Marketplace. View all our Scrum materials here.

Did you know?
The average daily rate of a McKinsey consultant is $6,625 (not including expenses). The average price of a Flevy document is $65.

Explore all of our best practices in: Scrum

Scrum Case Studies

For a practical understanding of Scrum, take a look at these case studies.

Agile Transformation in Global Hospitality Firm

Scenario: A multinational hospitality company is struggling to adapt to the rapid pace of digital transformation within the industry.

Read Full Case Study

Agile Transformation for Forestry Products Leader in Sustainable Market

Scenario: The organization, a prominent player in the forestry and paper products industry, is facing challenges in adapting its Scrum framework to keep pace with rapid environmental and market changes.

Read Full Case Study

Agile Scrum Transformation for Maritime Shipping Leader

Scenario: A leading firm in the maritime shipping industry is facing challenges in project management and product development due to outdated and rigid practices.

Read Full Case Study

Scrum Efficiency Enhancement in Luxury Retail

Scenario: A luxury fashion retailer is struggling to keep pace with rapid market changes and consumer demand fluctuations.

Read Full Case Study

Agile Transformation for Maritime Shipping Leader in Competitive Market

Scenario: The organization, a prominent player in the maritime shipping sector, is grappling with outdated project management methodologies that impede its ability to respond swiftly to market changes and customer demands.

Read Full Case Study

Agile Scrum Transformation for Aerospace Defense Contractor

Scenario: A leading aerospace defense contractor is struggling to meet the fast-paced demands of government contracts and international clients due to its outdated Scrum methodology.

Read Full Case Study

Explore all Flevy Management Case Studies

Related Questions

Here are our additional questions you may be interested in.

What are the implications of remote work on the effectiveness of Scrum teams?
Remote work impacts Scrum teams by challenging Communication, Collaboration, and maintaining Culture; necessitating adaptations in Scrum Practices, Time Zone management, and Work-life Balance to sustain Performance and Productivity. [Read full explanation]
What role does organizational culture play in the successful adoption of Scrum?
Organizational culture significantly impacts Scrum adoption, with collaboration, flexibility, transparency, and continuous improvement being crucial for Operational Excellence and successful agile transformation. [Read full explanation]
Can Scrum be applied to non-project based continuous operations, and if so, how?
Scrum can be effectively adapted for non-project based continuous operations, enhancing operational agility and efficiency by reimagining its roles, artifacts, and events to focus on ongoing improvement and incorporating flexibility to address rapid operational demands. [Read full explanation]
How does Scrum facilitate digital transformation in organizations beyond the tech industry?
Scrum drives Digital Transformation across industries by promoting Rapid Innovation, Cross-Functional Collaboration, and a Culture of Continuous Improvement, enhancing Customer Experience and Competitive Advantage. [Read full explanation]
How can Scrum be integrated with traditional project management methodologies in large organizations?
Integrating Scrum with traditional project management in large organizations involves strategic analysis, adopting hybrid approaches like Water-Scrum-Fall, and cultural adaptation for improved agility and project delivery. [Read full explanation]
What are the benefits of integrating Scrum with Kanban for workflow management?
Integrating Scrum with Kanban, or Scrumban, provides organizations with improved flexibility, optimized workflows, enhanced quality and customer satisfaction, and better team collaboration and morale. [Read full explanation]

 
David Tang, New York

Strategy & Operations, Digital Transformation, Management Consulting

This Q&A article was reviewed by David Tang.

To cite this article, please use:

Source: "How can executives ensure alignment between Scrum teams and corporate strategy?," Flevy Management Insights, David Tang, 2024




Flevy is the world's largest knowledge base of best practices.


Leverage the Experience of Experts.

Find documents of the same caliber as those used by top-tier consulting firms, like McKinsey, BCG, Bain, Deloitte, Accenture.

Download Immediately and Use.

Our PowerPoint presentations, Excel workbooks, and Word documents are completely customizable, including rebrandable.

Save Time, Effort, and Money.

Save yourself and your employees countless hours. Use that time to work on more value-added and fulfilling activities.




Read Customer Testimonials



Download our FREE Strategy & Transformation Framework Templates

Download our free compilation of 50+ Strategy & Transformation slides and templates. Frameworks include McKinsey 7-S Strategy Model, Balanced Scorecard, Disruptive Innovation, BCG Experience Curve, and many more.