The business case for agile--and how to catch success
You’ve heard of agile and you know how popular it has become. Some enthusiasts believe it is the key to all success in the future—but is it all it’s cracked up to be? With the investment it requires—of time, people, budget, energy and more—is it worth it in the end?
It would seem so.
First, it’s important to know that agile, based on the Agile Manifesto developed in 2001, includes key principles. There are no less than 40 groups, companies and methodologies that claim to have the corner on how agile is best applied. But if they’re worth their salt, they include the following principles—one way or another:
- Focus on people over process
- Embed customers and their feedback in order to continuously improve
- Deconstruct work into small segments and organize effort into short chunks (typically called sprints) in order to get quick feedback and make nimble (agile!) course corrections
- Dedicate people to teams and focus on one project at a time
- Experiment and learn continuously
- Ensure transparency of the work and continuity of the team.
These principles can be applied in all kinds of situations, whether in a purist sense including all the mechanisms of agile working, or at a principle-level with teams who want to apply portions of the theory to improve their work. In fact, the Scrum Alliance reports agile methodologies are used in teams well beyond IT—from R&D and sales/marketing to HR and finance.
This new way of working is—well—a lot of work. Ideally, agile shouldn’t add to a team’s burden. It should be a different way of doing the same work. It should increase efficiency and throughput (velocity). But any change requires plenty of effort—roles, organizational systems, leadership approaches and even rewards and recognition must change. In the end, implementing agile is a strategic decision requiring significant investment.
It’s Worth It
Agile is part of a positive chain of results. In a study published in the Journal of Operations Management, agile methodologies contributed to operational performance which in turn contributed to marketing and financial performance of the organization. In additional research, 54% of people reported agile approaches (specifically scrum) resulted in improved satisfaction with deliverables.
But You Must Do It Right.
People must be dedicated to agile teams. Research by CA Technologies across 160,000 projects and 50,000 agile teams found when team members were 95% dedicated to an agile team, their productivity doubled, compared to teams in which members were only 50% dedicated. Quality, predictability and responsiveness were also better with more dedication, the differences were just not as drastic as that of productivity.
Teams must be stable to reap the full benefits of agile. While it is relatively rare for team members to remain the same from quarter-to-quarter, a higher percentage of stability contributes to 60% better productivity, 40% better predictability and 60% better responsiveness. This makes sense because with greater continuity of team members, teams can focus on their work rather than on selecting, orienting, training or acculturating new members.
Sprints should be kept short. This study also found a correlation between sprint cycle time and results. Companies may opt for longer sprint times (three or four weeks typically), but using two-week versus four-week sprints correlates with 14% greater productivity, 8% greater predictability and 26% more responsiveness.
The whole organization must be aligned. Companies choose to employ an agile methodology for many reasons—improved time-to-market and simplified processes are examples. But when companies make the decision to apply agile to all disciplines across the company, rather than just within one discipline, they see the greatest performance payback on multiple dimensions—predictability, productivity, quality and responsiveness. This is probably because when agile is an organizational decision, it tends to foster greater support in terms of training, education and system-wide changes that foster and embed the new work methods.
Why agile works
The reasons agile works are perhaps as interesting as the results they drive. Another study presented at a conference of information systems in New Zealand found when agile teams work effectively they tend to share a lot of information. This contributes to shared mental models and helping behaviors. Essentially, fast information flow (information density) contributes to people who have shared thinking and common ways of understanding. This shared experience contributes toward team members who stay aware of each other’s needs and provide support, assistance and guidance on tasks, making for better outcomes overall.
It’s all about people
Perhaps the best result is all about people. In another exploration, 88% of over 2,000 respondents representing 91 countries and 27 industries reported agile—and the scrum methodology specifically—improves quality of life. Since a key tenet of agile is the importance of prioritizing people, this is heartening indeed.
In the end, agile is no small endeavor. It is easy to learn, but difficult to master and therefore requires a sustained commitment for implementation, learning and ongoing improvement. It is a journey that is never complete, but the reasons for investing are clear in its results. For most companies, the people and business results make it well worth the effort.
