I’ve had the word ‘agile’ in my job title for the last 15 years or more but I’m still painfully aware of the blank expression that I’m met with when responding to questions on my occupation at events or during casual conversations. Whilst some now associate it with technology or software development, this article tries to explain why every business should at least be considering its approach to agility.
Business agility refers to rapid, continuous, and systematic evolutionary adaptation and entrepreneurial innovation directed at gaining and maintaining competitive advantage.[1]
To put it another way, it’s about the ability of a business or other organisation to react to the constant changes in the world we operate in. If your products and services don’t evolve and grow with the market or changing customer demands, then you will fall behind your competition. There’s no rocket science there, so the question is how can business agility help? How can you ensure that you are developing your products or services in the most effective way and minimise wasted effort and cost?
Do you really understand the complexity of your business? What are the unknowns that you must deal with daily and how do you manage any risks created by those unknowns?
Overview
The rate at which the world around us is changing can be alarming and like a rabbit in the headlights, without adaptability, we may be left paralyzed when facing a changing market or environment. To improve our chance of not only surviving, but thriving, it is possible to not only react well to change but learn to make it an integral part of strategy. A business which reacts quickly to changing market conditions can take advantage of emerging opportunities and forge ahead of the competition.
There are numerous techniques which can help ensure that the architecture of your business supports that agility. Simplifying internally and removing slow or wasteful practices will all help your reaction speed. A value stream analysis can help you understand what is genuinely important when it comes to creating value for your customers and highlight those areas where your time (and money) would be well spent on improvements, as well as identifying the bottlenecks which may well be getting in the way of greater success.
As an example, let’s consider decision making within your organisation. Are all decisions taken at the most appropriate level? Many businesses have looked at the level of autonomy that customer facing people have and whether they are empowered to make decisions which will immediately impact customers. The impact on customer loyalty of getting such an instant decision rather than waiting for higher level management approval may be seen in ratings systems (e.g.: Trustpilot), in the short term but will ultimately also have a positive effect on the bottom line.
The topic of autonomy is important not just at the individual level but also relating to how your business is structured. If your teams are heavily inter-dependent, then your customer response time is likely to be slower as delays will creep in every time another team has to be consulted. Again, a technique such as value stream mapping will highlight where the delays are within your business and where potential re-jigging of teams may improve internal communications and result in a more stream-lined result.
Ideally, every team in your business should be able to create customer value on its own – that is team autonomy. Having several teams regularly creating value is preferable to the high-risk approach of periodic high value creation requiring all those teams to do their bit. Delivering value incrementally not only reduces the risk of straying from the genuine customer need but also facilitates a faster pivot if market conditions change. In contrast, if your business looks like a monolithic tangle of dependencies and governance control then that’s how it will function.
Just a note at this point to beware of major re-organisation as it rarely results in improved business agility. Most large-scale reorganisation only results in new problems replacing old ones (and in the worst case, adding to them). The secret to successful change is keep it small, know how you are going to measure results and build on the wins. If regular, incremental change becomes part of your culture, then not only does the fear of change reduce but the positive benefits are compounded.
Lessons Learnt
Consider the ideal of a non-hierarchical organisation without a single point of control. In such an organisation, individuals function autonomously, constantly interact with each other to define the organisation’s vision and aims, maintain a common understanding of requirements, and monitor the work that needs to be done. Roles and responsibilities emerge as needed from individuals’ self-organising activities and remain focused on the common team goal. Key decisions are made collaboratively, on the spot, and on the fly. Because of this, knowledge, power, and intelligence are spread through the team, making it capable of quickly recovering and adapting to the loss of any key individuals.
In the real world, the work we need to do can be complex with uncertain outcomes and goals that can change over time. One of the lessons learnt in the world of software development over the last 25 years or so, is that the traditional approach of dealing with these issues, by employing planning experts who would attempt to pre-determine every possible detail prior to implementation, is prone to failure and even the most carefully conceived projects will be impossibly difficult to manage. Agile techniques, represent an alternative approach to the classic prescriptive planning approaches to management. The focus of agile methods is to address the issues of complexity, uncertainty, and dynamic customer demand, by making planning and execution work in parallel or short iterations rather than in sequence. This reduces risk and waste by eliminating unnecessary planning activity, and the resulting unnecessary work.
Thus, by employing agile techniques we can ensure our teams are working efficiently and give us the time to improve their effectiveness by constantly checking customer need is being met. When necessary, we are able to alter course. Ask any ballroom dancer: taking small steps at a brisk but controlled speed allows one to be nimble and change direction quickly and easily.
History
Lean Manufacturing
When the Japanese car manufacturing industry, specifically Toyota, was working out how to recover in the post WWII years it had to face some hard facts. It couldn’t throw money at the problem in the same way that their American competitors did. It didn’t have the space or investment budget to build cars in the same manner, with massive inventory and economies of scale as employed by Ford or General Motors. No, it had to be smarter than that and find more efficient and less wasteful methods of production.
It created the Toyota Production System (TPS), a management philosophy and set of practices that organises manufacturing and logistics for the company. Whilst much of the approach was created between 1948 and 1975, it continues to evolve and remains at the heart of the business today – it is often referred to as The Toyota Way.
In 2017 (the latest figures I had to hand) Toyota was the largest motor vehicle manufacturer by production volume in the world. So, it looks like the Toyota Way helped.
Because of its focus on removing wasteful practices a lot of the good stuff in the Toyota Way is now referred to as ‘Lean’ and is summed up in seven very simple principles.
The birth of ‘Agile’
If we roll forward to the 1990s and peek into the world of software development, we see an industry struggling with its own identity.
When software first became a significant entity back in the 1960s, it was organisations like NATO that set some of the guidelines and best practices via its Software Engineering conference. Software was clearly going to be important and therefore it needed to be built in a very controlled and highly engineered way as we would expect for architecture or spacecraft.
However, by the 1990s some people were starting to question this approach. Software wasn’t like building houses, it was much easier to undo the lines of code you had written the previous day than it was to tear down a wall and rebuild it a few feet further over, and so this opened the possibilities of a different line of attack.
Several different software teams around the globe were starting to experiment with new attitudes to creating software and when a group of thought leaders in this area got together in Feb 2001, they very quickly identified what their different methods had in common and how they differed to the conventional ‘engineering’ approach. They came up with 4 simple value statements showing what they believed was important and 12 principles to summarise the commonality in their specific frameworks or methodologies. The Manifesto for Agile Software Development was born.[2]
Going forward
The software development world has learnt that it isn’t an engineering discipline in the conventional sense but has more in common with creative arts, in the sense that the most effective way to build software is through iterative learning with rapid feedback from end users to collaborate and find the most effective solution. Combine this with the lessons learnt in the world of lean manufacturing as exemplified by Toyota and we can work towards better efficacy.
The lessons learnt in the software development world are now being applied across many other sectors including other forms of product development and many of the service industries. It is relevant wherever a business in creating value for its customers. In essence, by employing business agility techniques, we can build not only the right thing (effectiveness) but also build the thing right (efficiency).
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The author is a Business Agility Coach. For over 20 years he has worked with numerous teams from across many sectors improving working practices and creating organisational culture which is conducive to thriving in a dynamic business environment.
[1] Baškarada, Saša (2020). “The Seven S’s of Organizational Agility”. AWS Cloud Enterprise Strategy Blog
[2] Manifesto for Agile Software Development (agilemanifesto.org)