The annual Version One ‘State of Agile Report’ sets out the advantages Agile approaches can bring. So what are the top five benefits? The ability to manage changing priorities, project visibility, increased team productivity, delivery speed or time-to-market, and team morale. No one can deny these are great benefits, but I think we should be more ambitious about the benefits Agile can bring – not just to a single product or team, but to the whole organisation. In an increasingly challenging environment, Agile can save companies from failure. Here’s why.
“Change is the only constant in life”
This is a well-known quote from Heraclitus. But in my view, it’s never been truer. Today, we repeatedly see dramatic changes at a macro and micro level, all of which have an impact on the business and public sector environment. That makes Agile approaches ever more critical as they help organisations be more innovative, efficient and effective. Predicting what will change and when it will happen is increasingly difficult. And this has led to a reduction in the average lifetime of organisations. In 2014, Wired magazine stated “What was once a 61-year life span for the average firm on the S&P 500 in 1958 narrowed to 25 years in 1980 — to 18 years today.” They were forecasting that it would drop even lower by 2025.
Five steps to surviving in a changing world
To respond to this dramatic pace of change, I advise organisations take five actions. And Agile can help with all of them. Agile isn't just about Scrum, IT or specific techniques or practices. It should play a much bigger part in organisations, by creating business agility.
- Get really close to customers – all organisations need to invest in understanding their future. The risk of 'flying blind' is simply too great. Horizon scanning and scenario planning are two great techniques to help you do this. But getting closer to your customers through better feedback, analysing the data you already have and connecting different sets can quickly bring valuable insight into how you can continue to meet your customer’s needs as they evolve. Fashion retailer Zara continuously monitors customer preferences and sales patterns to quickly produce new items to replace or replenish and respond to local fashions. The Agile manifesto highlights customer collaboration; the ultimate realisation of this is co-creation. DEWALT, Lego, DHL and Made.com are all companies who work with customers to create new products and services.
- Organise for flexibility – companies that are made of a range of different component parts could arrange themselves so the various components grow, shrink and flex. This allows them to exploit opportunities as fast as possible and cut losses rapidly. Computer games company Valve allows anyone to start a project. Those projects people choose to work on can prove their viability and grow. Those that can’t, shrink and close. Neighbourhood care firm Buurtzorg has teams of 10 to 12 nurses who serve patients in defined neighbourhoods. These teams are responsible for all aspects of their operation – from setting up the office, relationships with doctors and pharmacies, how they work together, expanding the team, splitting the team and maintaining effectiveness. Care is more tailored to local patient needs, and up to 40% cheaper. Patients stay in care only half the time they would elsewhere and heal faster compared to other nursing organisations.
- Continuously change – rather than undergoing periodic change initiatives, organisations should continuously adjust. The adjustments may be product based or more structural, and take place at any level. This way organisations can adapt to the environment and changes in strategy. Rigid organisations will get left behind or outmanoeuvred. The Agile principles state ‘responding to change’ and reflecting on how to become more effective, change is a normal part of how to operate. For example, I worked with a client to help rebuild their software development capability. As the work progressed, we understood more about the organisation, and the organisation understood more about Agile. We talked increasingly about the overall vision and goals of the organisation and we are now working together to align the organisational structure to better deliver their vision. Once the structural change starts, they may identify further changes and when it is appropriate to make them. It’s important to note that the change doesn’t always have to be made at once, rather, it is best made when need and understanding are clear, and at the right time. Ultimately, this flow of changes becomes a normal part of the way the organisation operates, rather than a one-off.
- Respond quickly – decisions need to be made close to where they’re needed. This requires distributed decision-making and close cooperation between those with the skills needed to take effective action. This may mean breaking down silos and distributing skills across the organisation. One issue we often encounter is the funding of initiatives. Annual planning can clash with Agile initiatives that may want to expand, pivot or contract at a faster tempo. Making members of finance part of the Agile initiatives moves them close to the problems and means they can advise on an ongoing, real-time basis. Other skills that can need aligning are HR, legal and compliance. Over time, these skills become less centralised, more spread across the organisation and aligned with value delivery. This enables the Agile principle of business people and developers (creators of value) working together daily at an organisational level.
- Trust your people – when things are moving fast, there isn't time to double-check every decision and action. There’s no option to plan the perfect approach as people have to respond to an emerging environment. People are hired for their skills and experience, so should be allowed to apply these to challenges. Leaders should create a supportive, enabling environment, supply a sense of direction and then get out of the way. As the Agile principles state, “Build projects around motivated individuals. Give them the environment and support they need, and trust them to get the job done”. Regular reviews of progress will allow corrections to be made if required. Buurtzorg has a central team of around 30 people for a company of 7,000 and there’s no management hierarchy. The team are experienced nursing leaders and coaches who help the nursing teams – but aren’t decision makers. It’s the nursing teams who make the decisions.
The benefits of adopting Agile are clear, with more and more organisations adopting Agile at scale. Forbes and the Harvard Business Review, amongst others, recognise Agile as critical to helping organisations respond to change. So it’s time to think – how can Agile make a difference to you?