1. Unlocking the Power of Teams
September 2019
Hello Everyone! Thank you for joining our discussion today. For today’s discussion, I’ll be sharing Anthem’s Lean Agile journey and how some of the practices we’ve put in place to enable our transformation.

2. Introduction Sheri Reed Vice President, IT Enterprise Agile
Before we get started, let me tell you a little bit about myself… 2

3. Culture & leadership are critical to a successful enterprise transformation   
As we work towards transforming our organization, we must look at how we need to transform our culture so we may unlock the power of the teams. We have to invest in our people and provide them with the tools and resources needed to be successful. To do so, we must begin to transform our culture to one that embraces change and empowers our associates. 3

4. Our organization’s Culture is at the heart of our transformation.
Why Change?
Our industry continues to face disruption on multiple fronts. In order to remain competitive, Anthem can, and must do better… much better. We need to expect more of ourselves and expect more of what and how we serve our customers.
Our organization’s Culture is at the heart of our transformation.
So why Did we embark on this journey? 4

5. Anthem’s Agile Transformation Roadmap
We started our transformation just a few years back. As an enterprise, we’re still in our infancy stages of transformation.
It was late 2016 that our leadership team began to embrace the idea of Agile. It was then we launched the COE and formalized the definition of activated Agile Team. While we had pockets of Agile teams across the enterprise prior to 2016, there was no mechanism to track which teams were Agile, which were still waterfall and what about those in between?
We have grown over the years with the adoption of SAFe and provided enterprise-wide training for Agile and SAFe as well as defined tools and provided clarify on the Agile role.
Fast forward to 2019, we continue to advance our transformation through technology enablement, launch of LPM, continue to drive leadership culture and mindset and measuring our progress along the way. We’ll talk more about those measurements later in the presentation. 5

6. Anthem Enterprise Agility Centers of Excellence
As part of our transformation, Anthem stood up the Enterprise Agility Centers of Excellence which is made up of 3 key areas of focus, Agile, Dev Ops and Quality. Our aim is to embrace Agility across the enterprise by enabling DevOps and improving quality for our customers. 6

7. Agility as a Core Value
As we all know, transforming organizational culture is marathon rather than a sprint. Early this year, our CEO, Gail Broussard developed and launched our new Values, Vision and Mission Agility became one of Anthem’s Core Values .
As an organization, we have to be able to rapidly adapt in response to changing market conditions and consumer needs. Our senior leaders saw the importance of that and believe that Agility is how we will achieve our mission and vision. 7

8. Culture: Take it to the road…
In-person Strategy Map sessions across the country
Connecting our culture to our mission and vision.
Engaging and interactive experience
We took our culture message to the road. Met senior leaders and middle managers across the organization and led workshops to connect our strategy with our culture. Through these workshops, our leaders and associates saw what was needed to truly transform our culture and to achieve our vision of being the most innovative, valuable and inclusive partner.
We’ve also hosted lunch and learns and leadership workshops for Agile, Dev Ops and Quality to include our Dish on DevOps sessions. 8

9. Change Champions mobilized across the organization
Agile, Dev Ops and Quality Champions across the enterprise partner with and collaborate with the COE to advance our transformation.
To be successful, we needed to utilize talent across our organization to mobilize change champions that will help propel our transformation. We tapped into key individuals in each organization to share their ideas and partner with us to drive change and lead Agile, Dev Ops and Qualify efforts for their towers. It is through the collaboration and partnership with our Champions that we’ve been able to achieve what we have to date.
Each tower identified a delivery champion in Agile, DevOps and Quality
Delivery Champions meet on a weekly cadence
Delivery Champions as stakeholders for the COE Agile Release Train
Delivery Champions cascade new practices, standards and guardrails to their tower
Learnings:
Started out ground up
Now Top down driven- 9

10. Empowering our team members through education
We’ve made a tremendous investment in education and training for our associates throughout this transformation. We identified and trained internal SPCs (SAFe Program Consultants) across the organization, offered SAFe certification courses internally for our associates, provided virtual training sessions customized by role. To date, we’ve trained almost 12,000 associates.
We’re working on enabling Towers to be self sufficient through the Train the Trainer program as well as provided resources and guidance to ensure
Roles definition and clarity.

11. Our Evolution: Local Presence to Global Scope
We’re working to ensure alignment and consistency between US’s and India’s Agile Centers of Excellence.
With the launch of Legato, Anthem’s subsidiary in India, we were able to leverage talent across the globe through Captive locations in Hyderabad and Bangalore.
COE Lite:
Captive, Locations
One solid Anthem
Expanding culture
We had lots of contractors through various vendors. With ebb and flow of staffing, difficult to change culture that is ever-changing
‘Embrace/Expanding our culture across the water”

12. Average Time to Progress Through the Stages of Transformation
We took the opportunity to have an external organization review where we stand with our Agile Maturity. This assessment validated our perspective that while we’ve made great progress, we still have a long way to go in our transformation.
The pace of Anthem’s Agile Transformation is ahead of industry averages based on the stage of transformation reached so far. Anthem is nearly at a Run in maturity level after just 2 years (6 months sooner than industry average).
Anthem will be projected to reach “Fly” in another 1-3 years
While it takes less time on an average to get to crawl and walk stages, it takes quite a lot of time to get to fly stage
Avg time for companies at Crawl: 1.5 years
Avg time for companies at Walk: 2.3 years
Avg time for companies at Run: 3.2 years
Avg time for companies at Fly: 4.4 years
We expect that Anthem will take somewhat longer than average due to the company’s size, hence the range of the trajectory from 1 to 3 additional years. To do this in one year would require significant financial investment, leadership support, and other factors. However, here are some select examples of why certain companies were able to do this so quickly:
Bankwest Success Factors: While Bankwest has reached Fly stage in 2 years, there are a few factors that accounts for their success:
Size of Org: Relatively small size of org ~5000 as opposed to Anthem (~57,000)
Leadership Support: 2 day leadership immersion session for 20 of the senior most leaders;
CIO was supportive from the beginning
Adoption: 2/3 of the org transformed so far
Healthcare Provider Success Factors:
The Chief Digital Officer (aka CIO) mandated all project/teams be on some form of Agile delivery method by a certain date and created/funded a COE to deliver and sustain training and coaching worldwide -- you were either agile (or hybrid) or you didn't really exist
Forbes Article on Agile Transformations:
Microsoft’s Agile Transformation:
Bottom-up at first: For the first 5 years, the Agile movement was a bottom-up movement. It was only around 2014 when Satya Nadella became Microsoft’s CEO that the entire top management embraced Agile. A key fact in the journey is that the new CEO came from the very division of Microsoft that had embraced Agile.
The transition took time: The Agile journey at Microsoft has been underway for some ten years and continues to evolve. Firms that imagine they can transform rapidly usually run into problems.
GE’s Transformation:
Key elements in GE’s journey include:
Top-down implementation: GE’s embrace of the lean startup was top-down from the start. Turned out to be largely ceremonial.
Process ahead of mindset: GE’s CEO approached implementation of Lean Startup as a process because that is the GE way. As late as September 2017, Immelt wrote: “GE is famous for creating and religiously implementing processes for managing virtually everything we do. The task of transformation is no different.” He never grasped that Agile is mindset.
Stalled Agile Journeys
We also see many examples of Agile journeys that begin an Agile fashion in the software development division that ultimately fail to support from the top management support.
As the agile movement spreads, the tension between the two different modes of operation – Agile and Legacy
Leaders declare victory: “We are already agile. We don’t need agile leaders or coaches and more.” As a result, the Agile journey can stall or die, or at least go underground.
Yet the problem in the marketplace that had prompted the firm to pursue Agile in the first place still exists. Without agile, the firm isn’t able to adapt rapidly enough. So often, after a few years, we will see the firm launch a new effort to “become agile.”
*We have heard this at Anthem from folks who came from Capital One – they have had 2 to 3 “Agile Transformations” over the years
The Amazon Story:
While top-down Agile implementation can be problematic, that is not to say that it's impossible
Amazon grew rapidly, but it was only in 2002 that the CEO, Jeff Bezos, formulated his theory of organizing work in “two-pizza teams,”
Bezos “framed the kind of employees he wanted in simple terms,” as Brad Stone explains. “All new hires had to directly improve the outcome of the company. He wanted doers—engineers, developers, perhaps merchandise buyers, but not managers. ‘We didn’t want to be a monolithic army of program managers, à la Microsoft. We wanted independent teams to be entrepreneurial.’”
Amazon began to crystallize its approach to developing new businesses through what it called a “PR/FAQ.” This is a document in which Amazon “works backward” from the future
This process has led to an astonishing array of major innovations: Cloud services with AWS in 2006; Amazon’s Kindle in 2007; video on demand in 2008; Amazon Studios in 2010; Amazon Echo in 2015; and Amazon groceries in 2017, among many others
At the same time, Amazon also had many failures. Amazon jewelry and shoes never took off (although eventually, Amazon bought Zappo’s). Amazon Wallet and Web Pay were closed down in 2014, as was Amazon's disastrous  Fire phone.
Findings From The Journeys
Mindset: While each of the journeys is unique, a common characteristic is that becoming Agile is essentially a shift in mindset.
Holistic: The post-bureaucratic approach applies to the whole organization, not just the R&D department. It includes talent (formerly HR), accounting, procurement, finance and so on. Partial implementations are problematic.
Both bottom-up and top-down: The journeys of each firm tend to be both bottom-up and top-down in spirit and orientation. Even in Amazon, which is clearly being led from the top, there is also a great deal of freedom for teams to pursue their mandate, with multiple paths to getting a “yes,” if they need change. The successful firms are based on pull, rather than push. In each case, the top has been supporting and inspiring change driven largely from below.
Learning from failure: None of these firms had a smooth path to success. All of them encountered failure along the way. While Microsoft and Amazon learned from failure, it seems that GE did not.
No perfect model: While the post-bureaucratic model is in many ways is a better fit for the rapidly changing marketplace of the 21st Century, it has, like all models, limitations. Thus there is no perfect vision, that needs only a certain kind of severe discipline, to ensure success. Business schools and consulting firms tend to suggest that it is possible to attain to some kind of nearly absolute knowledge and to tidy the world up, to create some kind of rational order, in which intellectual error can be avoided. All of these models have limitations. The question is whether they learn from the limtiations.
No panacea: All of these post-bureaucratic firms are imperfect: They are all on journeys and the journeys continue. Their very success has turned some of them into the quasi-monopolies, giving rise to the risks that monopoly always brings. Issues of privacy and exploitation of personal data, the creation of sweatshops rather than human-centered organizations are also present in some cases. In other cases, there are steps backward after steps forward. Greater involvement of the state will be essential in helping rectify these flaws.
Profitable: These are organizations in the private sector (although similar developments are beginning to emerge in the public sector.). When Agile is done right, it can make a great deal of money, although making money is the result, not the goal. Post-bureaucratic management is thus not about tradeoffs. In fact, the new way of managing has helped public corporations overcome adverse pressures from the stock market and hedge funds to give priority to short-term goals ahead of long-term shareholder value.
And read also:
Why Agile Is Eating The World
Explaining Agile
Ten Agile Axioms That Make Managers Anxious
Six Lessons That Society Must Learn About Agile
Surprise! Microsoft Is Agile

13. Employing measures that unlock the power of teams
In this section, I’ll share with you some of the metrics we’ve employed to provide feedback to our team members and using that feedback to drive relentless improvement. 13

14. Growth in agility across the organization
Metrics Summary
Three priority metrics have been identified to support Anthem’s goal of Enterprise Agility in 2019
Earlier this year, we identified priority metrics to support Anthem’s Enterprise Agility efforts. Each of these goals have been added to our leaders goals for 2019 which has resulted in putting Agility at the front and center of each leader’s mind.
Adherence Metrics include:
Product Owner Reported
Business Value for PI Objectives Reported
Baseline AHR Assessments Completed
Follow-up AHR Assessments Completed
IT Team Reported
Story WorkID Reported
Story Systems List Reported
Story Fix Version Reported
Story Points Reported
Epic Work ID Reported
Epic Systems List Reported
Controls Assessments Completed
Defect Leakage % = Prod &Waranty Defects /Total Defects Logged
Agile Adoption = # of individuals assigned work for Agile team, has an Agile Title, holds Agile Role in APM
Adherence to core CoE requirements and standards across all Agile Activated teams
To meet expectations – adherence 90%-94.99%
Exceed expectations – 95% or greater
Reduction in percentage of defects leaked into Production or Warranty
To meet expectations – 15% reduction over 2018 average
Exceed expectations – 20% reduction over 2018 average
Growth in agility across the organization
To meet expectations – 10% increase in agility footprint
Exceed expectations – 15% or greater

15. Foundational Metrics Agile DevOps Quality
Agile, DevOps, and Quality metrics identify potential opportunities for improvement.
Agile
DevOps
Quality
Business Value Tracking
(Planned vs. Actual, Predictability on High Value Objectives)
% Unit Test Code Coverage1
% SIT-UAT-E2E Tests Automated1
Systems with CI / CD Enablement
% Increase in Deploys to QA2, Prod
% Build Passage Rate
Prod Defect Reduction – CoEs will each look at different root causes
Feature / Story Cycle Time
Sprint Predictability
Testing Time / Hours
Defect Leakage-Containment
(shift left) 2 1 3 4 6 5 9 10 11 8 7
We also employed Foundations Metrics to provide team level data. These metrics were designed as a feedback loop to help teams and programs understand not only if they are meeting their goals but also identify areas where they might improve. Providing visibility into the team’s progress and opens the opportunity for discussion with leadership on challenges that impede the team’s ability to be successful.
For example, if feature/story cycle time is long, we may need to look into what is impacting the flow of value. Through this review, we may discover that the teams are taking on a lot of unplanned work impacting their ability to deliver on their commitments. Or, we may discover that there’s an issue with dependency management which could drive conversation about team and train structure.
We’ve developed a self-service dashboard to enable teams to view key metrics on demand.
Foundational Metrics are tracked by the EACOE and reviewed on a monthly basis with Senior Leadership and Delivery Champions to identify
potential areas of improvement. 15

16. Addressing Organizational Impediments
Performance
From Outputs
to Outcomes
Continuous Improvement
Innovation
Moving from Outputs to Outcomes - In order to enable a culture of continuous improvement, we need to understand where we are and what specific areas continue to pose a challenge for us.
AHR assessments empower our team members with an opportunity to give their candid feedback and a mechanism by which specific action is identified based on that feedback. We’re using this feedback to help us improve performance, drive innovation and a continuous improvement culture.
The formation of Growth teams was a first step to ensure completion of identified growth items. We still have some work to do to get traction on the identified growth items to ensure specific action is taken.
Identification and Tracking of Identified Growth Items

17. Obstacles/Challenges
Process
People and Culture
Obstacles/Challenges
While we’ve made a lot of progress in a very short period of time, we’re far from being done. We’ll continue to lead the way to help our organization improve.
We are still battling some critical impediments:
From a People and Culture perspective, we still are operating in a culture of fear. Our associates don’t always feel safe opening up to share ideas and suggestions for improving the process and therefore impeding our ability to be truly innovative.
As we developed metrics to track our progress, we recognized a need to better socialize the value and purpose of metrics. Some of our leaders were using the metrics reported to scold their teams for not doing well rather than looking at the metrics as an opportunity to help the teams improve.
From a process perspective, we’re working with our Finance leads to review our annual planning process. We’re working towards improving our funding model to ensure that we’re funding value streams that deliver on our strategic initiatives rather than funding projects. Our organization structure is still very siloed which leads to unnecessary cross-organizational dependencies.
Lastly, Leadership engagement and transformation continues to be a focus for us. Many of our leaders say they support Agile, but don’t really know what that means. We’ll need to continue to work with them on how to demonstrate behaviors that enable Agility within their organizations. we need to continue to work with our leadership team to help them transition from their traditional role as a leader to one of a servant leader
Measures
Leadership

18. What questions do you have?19

19. Thank you!