What is Agile Methodology? (and why it is not a methodology)
Agile is more of a practice than a methodology and has its roots in the world of software. After its conception, Agile became widely popular because it provided organizations with greater flexibility, efficiency, and a result-oriented way of realizing technological developments.
Ever since then, the practice has been prevalent across different industries.
Today, most of the well-known tech and non-tech companies use an Agile approach for improving their processes. IBM, Microsoft, AT&T are some prime examples of companies that are using an agile approach.
But, does development really call for it?
The answer is YES!
The current pace of technological innovation is revolutionizing complete industries. Businesses that have been operating for a long time realize their lack of preparedness to adapt to the changes. This has made them look for practices that will enable them to adapt to the changes in the market, on the go.
This is where an Agile approach fits in.
An Agile approach is about working more collaboratively so as to release something quickly in the market and get instant feedback. This allows companies to streamline their processes and respond adeptly in light of the changes that are taking place in the business landscape.
Is Agile Addressing the Inefficiencies in your Processes?
When companies scale, they need to streamline their processes because the size calls for it. New processes need to be created and recently developed systems are to be put into place. This enables exponential growth, turning them into the big giants that we see today.
But sometimes, the processes created might entail inefficiencies. That’s a common downside of growth. For example, too many forms need to be filled to get a request through.
What is needed at this point? Let’s get back to the basics.
Companies need to check their basics when the inefficiencies kick in. Once they are ready to be creative and innovative, they start looking for new ways of doing things. This is where agile comes in as they start reaping the benefits.
They start working in an Agile fashion to achieve their milestones and activities. A study was conducted in 19 countries among professionals by Organize Agile. It revealed that almost half of the organizations were using an Agile Methodology for over three years or longer.
Source: Organize Agile
The figure depicts the usage of Agile as a methodology for change management across different companies. Commonly known as Agile Transformations, these pertain to large organizational changes that embrace Agile in multidisciplinary teams. This is to achieve results in an iterative, fast, and experimental manner.
The Benefits of Going Agile
Agile improves flexibility amidst a rapidly changing environment, and this is the reason cited by 83% of the respondents. Being able to leverage a quicker way of innovating and introducing new products and services in the market, companies can stay ahead of the competition and cater to the evolving customer needs.
The importance of Agile in today’s crisis is even more important, and the pandemic is reiterating how critical it is to be able to adapt quickly. And that’s applicable to all organizational facets.
From strategy to business planning to human resources to supply chain, agility is imperative. Businesses need to be able to navigate the storm, stabilize the impact of COVID-19, align resources to the current demand, and optimize their cash flow.
With the right framework and cultural mindset, organizations can achieve agility, and Cisco, Barclays, and Panera Bread amongst others are vivid examples and living proofs of it.
There are various agile methods that are present in Agile testing. The two most important of them, Scrum and Kanban, are briefly explained below:
What is Scrum?
It is an agile development method that deals with task management in a team-based environment.
Scrum believes in the development of a team. In Scrum, the product owner creates a product backlog and works with the team to bring the prototype to realization.
Cross-functional teams work in Sprints to deliver functionality at each iteration. After the Sprint is delivered, the Product Backlog is analyzed and the next set of deliverables for the next Sprint is selected.
What is Kanban?
Kanban is the second most popular Agile methodology. Emerging from a Japanese word, it contains all the information that is needed at each product stage for completion.
It pertains to be a highly visual workflow management method and is widely used by Lean Teams. Kanban works by allowing teams to work together more effectively through the provision of insight into product creation and delivery.
Kanban, unlike Scrum, has a focus on continual delivery.
These Agile methodologies help Project Managers to ensure breaking down project requirements into smaller parts, thereby providing flexibility and adapting to new requests. Other famous Agile methodologies include Extreme Programming, Lean Software Development, LeSS, and Lean-Agile Process.
Here’s a glimpse of the Agile Methodologies currently being applied across several successful organizations.
Source: Organize Agile
How to ‘go’ Agile?
According to Peter Jacobs, CIO of ING Netherlands, “You can’t be agile and traditional; there’s no cherry-picking with enterprise agility.” He added that you can’t cherry pick as per your own liking. For instance, some organizations want to embrace agility but do not want to give up their traditional methods. You just cannot do that!
Taking the example of ING forward, 350 teams consisting of 9 persons each were reorganized into different squads. The squads consisted of Marketing Specialists, Data Analysts, Product Experts, UX Designers, and IT Engineers.
The squads were self-sufficient in all aspects, ranging from delivery to management standpoint. This is how a typical agile transformation team structure looks like:
The Agile Team’s Working - What Should Happen at the ‘Top’?
A traditional agile team should be able to develop innovative and profitable solutions to varying issues that organizations can face. For instance, it should come up with new products/services, develop better business processes, or introduce new technology for supporting new offerings.
On the other side of the table, the Agile leadership team has a different role; build and operate an agile organization.
This, by no means, equates to replacing the typical operations with Agile teams at all levels. Let’s not forget: Agile is primarily linked with innovation. On the other hand, the testing and learning it consists of can overlook several functions as well as operations.
As such, building an agile organization means finding the right balance between standardizing functions, operations and pursuing innovations.
However, note that it is not at all easy to maintain a balance between the two in a large firm. This is because an organizational operating system consists of several components; from its purpose and values to data and technological systems. Any of the components can get out of whack, and affect the performance.
Reaching the Balance
An Agile Enterprise must be balanced. As each of the components in the organizational operating system is balanced for creating an Agile Enterprise, the leadership team needs to find an optimal balance for each of the components. Depending on the organization’s context and circumstances, the balance must be ascertained.
Source: Bain & Co.
Finding the balance is not a one-size-fits-all formula. Because as a matter of fact, every company and its activities will differ from each other.
Management of R&D activities for an electronics company will have a different balance point than a clothing company.
What is required of the agile leadership team is to create new metrics for determining how agile the organization is, how agile it needs to be and whether it is headed rightly.
Surveying internal and external stakeholders, innovation cycle, and flow efficiency help determine the state of an operating system and its components.
A sequenced list of activities is then developed, that aims to achieve balance for the component. Rebalancing the components, the operating system is pivoted towards efficiency, and an agile organization is created over time.
Here are some key insights on how some of the most famous non-tech companies became Agile. We will talk about Procter & Gamble, General Electric, and Lego.
How Procter & Gamble Utilized Agile to Keep Up With Consumers
Being a consumer products company founded in 1837, Procter & Gamble went agile for the first time in 2017, standardizing its operations and being consistent with the work processes.
The evolution of technology changed the consumer stakes, and a smarter solution was required to pace up with the fast-moving business. Urgency matters, particularly in the 21st century. Joan Lewis, the global consumer officer at P&G, says that the company needed to be more agile and be able to work in real-time.
Core Challenges faced by P&G
1: Traditional Research Methodologies and Lack of real-time Insights
The problem with the traditional research methodologies is that they lack the ability to leverage technological development. This inability falls back on the marketing teams, who, despite the innovations cannot obtain real-time insights into customer preferences. Moreover, the internal processes have also been inefficient.
2: High Labor Costs due to Inefficiencies in Operations
Another prime challenge was to improve its service while lowering the labor costs that resulted due to inefficiencies in the operations.
3: Keeping all Facilities at the Same Page
A solution was also needed that could help standardize the processes and organizational performance across P&G’s multiple facilities.
4: Identification of Recurring Issues in Supply Chain
On the macro level, the company lacked the agility to identify recurring issues in its supply chain.
5: Adoption of Technological Solutions
Moreover, there was an unanticipated challenge regarding the adoption of the technological solution in its facilities.
Results after going Agile
Procter & Gamble has been the trendsetter with the most progressive marketing approaches. Employing Agile research for its various brands, the company needed a key point to capitalize on consumer preferences.
Bryanna Land, Dayton Mixing Center Processing Engineer, Procter & Gamble asserted that ‘adopting the agile solution was really intuitive.’ Not only did it increase order productivity and accuracy, but it also increased batch production record efficiency by 40%.
Applying Agile helped P&G understand its consumer behaviors and thus it was able to optimize its internal processes along with the shopping experience.
General Electric - The Journey Towards Agile
The digital age has changed everything. Many companies, such as KPMG, have shifted to agile workspaces previously, and GE is also on the move towards transformation. It is progressively working towards agile offices to facilitate flexibility, creativity, and collaboration altogether.
The iconic GE embraced agile in 2012 when its CEO Jeff Immelt was stunned by the approach and implemented it throughout the company.
1: A $4 Billion Leap of Faith
The company’s digital transformation was accelerated, and a $4 billion 'bet' was made on connecting industrial equipment through artificial intelligence and the internet of things. The company adopted lean methods and underwent a transformation, which is a prime example of how modern companies drive growth through entrepreneurial management.
2: Top-down Agile Implementation
GE is one of the companies that had a top-down agile implementation. It was first implemented at the strategic level. This is what the HR Head of General Electric Australia & New Zealand, David Arkell, has to say about the overall idea behind agile development.
“We identified that on average every physical workspace we had—office or dedicated desks—was being utilized around 35% of the time.”
3: A Desk Audit - Yes!
A desk audit was conducted before whereby every physical workspace was identified and its utilization ascertained. For instance, if an employee is in one state for this week and in another for the next, the space he occupies in the second office will be empty for one week. This means the extra space can be compensated by having 70 desks for every 100 people.
This fueled the global transition within GE towards an empowered, flexible and agile environment. The HR Head said that they also wanted people to collaborate at a greater level.
4: Agility at the Core
Being a silo-driven organization historically, the company has been working in multiple sectors like Oil & Gas, Energy, Transportation, Healthcare, and Power. The customers also had to interact with multiple businesses at once. For example, BHP would deal with the Power, Transportation, and Energy business of GE.
Agility has transformed everything for them. The employees sit next to a new person every new day, and you are meeting different people. This is in alignment with the GE Store approach. The company sources technologies across the businesses to drive innovation.
How Lego Improved Customer Experience Through Agile
Lego, the popular toy brick maker began its journey to agility in 2015 when it encountered new complexities.
1: Modern Problems require Modern Solutions
The transformation started at the team level when it decided to expand to over 20 teams from just 5 so they could collaborate easily and in a better manner. Initially, 5 teams were transformed into self-organizing teams and the rest followed suit.
Although 5 teams were initially made, they still were unable to cooperate effectively. Lego then adapted to the Scaled Agile Framework and went to the program level from the team level.
Source: Object Style
2: Multiple Problems, Single Solution
There were issues concerning client collaboration, team alignment, platform development as well as release planning. To address these issues, the company implemented Agile which resulted in lesser duplication, improved planning, better execution, reduced dependency, and a greater level of customer trust.
3: Results Await!
Adopting agile resulted in empowered developers, accurate estimates, predictable outcomes, and fast communication. Not only that, but visual planning helps with focusing on important things like easier resolution and team performance.
Characteristics of Successful Agile Businesses
Let’s try to single out what the most successful agile businesses have in common.
From the above case studies, it becomes apparent that successful enterprises have agility as their establishing characteristic.
As they become Agile, they become better at predictability, enhance their productivity, reduce bugs, and eliminate duplication, resulting in faster response time and employee efficiency, and ultimately success.
How Can Your Business Embrace Agile planning?
Talking from an entrepreneurial perspective, using an Agile approach can render several benefits that go a long way. Consider the following example,
A vendor in Ohio had to migrate a website to their platform, and there was no time.
What was the way out? Using an iterative approach to the website.
Adopting the approach resulted in introducing customer-facing features. That was an 80% increased speed to the market.
And that’s the incredible power of an Agile Approach.
And that pretty much explains why so many Fortune 500 companies are using it for improving their processes. Apart from boosting work efficiency, it also helps them combat the aspects that come with scaling. It helps them adapt to the market changes and strengthens their entrepreneurial roots.