What is Agile in Business?

It is well known that organizations operate in an increasingly competitive environment characterized by volatility, uncertainty, complexity and ambiguity (VUCA). Access to information is extremely easy, consumers are increasingly educated, and the challenge for companies is to come up with solutions that are as relevant to the customer as possible. This is because it is not the product we make that is important, but the need or problem it solves.

Companies that manage to incorporate consumer desires and adapt easily to changes coming from the external environment are those companies that have business agility and that will still exist in 5 or 10 years.

But is having business agility the same as working in agile ways?

Agile working is just one of the answers that organizations find to acquire agility. That’s because Agile is a management approach that favours change vs. methodical planning over a longer time frame that is subsequently difficult to change.

Benefits of implementing Agile

According to the 2021 State of Agile report, the main benefits of Agile adoption reported by companies were primarily adaptability to change (70%), transparency in the way they work (70%), alignment across business lines (66%), faster delivery (64%) and increased productivity (60%). Although a potential secondary reason for implementation could be cost savings, only 23% of companies reported an actual reduction. The reason is that a strict focus on costs can be limiting to innovation activity and does not take into account opportunity costs arising from missed opportunities in the market.

The detailed report is presented below:

Source: State of Agile report 2021


Agile Manifesto

Agile Values and Principles

The agile way of working first emerged in the software development industry. It was intended to be a code of best practice that professionals in the industry could follow. However, the values and principles stated are universally valid, hence the transcendence to other industries that have identified with the philosophy and seen the benefits in the agile way of working.

At the core of the Agile philosophy are the 4 values:

  • Individuals and interactions vs. processes and tools
  • Working software vs. comprehensive documentation
  • Customer collaboration vs. contract negotiation
  • Responding to change vs. following a plan
  1. People and their interactions take precedence over processes and tools

One of the most popular software project cost estimation models, COCOMO model (COnstructive COst MOdel) is based on a study conducted on thousands of projects to understand what the determinants of a project’s success are. The result is extremely clear: the human factor correlates most strongly, 10 times more than the processes used! What was intuitively known is now backed up by data that is hard to dispute.

  1. Working software vs. detailed documentation

The focus is on delivering something (software, system, product, etc.) that works, as opposed to creating documentation that is extremely detailed for every possible situation and by the time it is implemented may have undergone many changes or may even no longer be relevant. This is why documentation in the Agile way of working is “just-in-time”, “just enough” and “just because”. It is built as the project evolves, so that it is ready at the end, not earlier, and contains strictly the end goal of the project, not countless intermediate variants.

  1. Collaboration with the client vs. contract negotiation

Just as a company operates in an environment of uncertainty, its customers have the same challenges. That’s why at the heart of the Agile philosophy is collaboration and understanding the customer’s need, which takes precedence over contract negotiation. After all, if a customer is successful with the delivered solution, then the supplier-company will also be successful. Following this approach, the contracts used in the Agile world are tailored to accommodate any future changes and remove the bureaucracy of signing additional documents as much as possible.

  1. Responding to change vs. following a plan

Agile is about change and by its proposed way of organizing, “inviting” change through each deliverable to the customer, soliciting feedback and being open to modifications. This is possible because unlike the traditional way of working, in Agile the planning is not extremely precise and detailed at the beginning of the project. Instead, the project starts with the view of the “big picture” and evolves with each deliverable according to the feedback received from the client. This feedback from the client may be in line with the initial overall plan or it may initiate a new direction, because in the meantime the client has acquired new information or has new challenges.

Furthermore, this set of values is complemented by 12 application principles, regardless of the Agile methodology used, as follows:

  1. Our highest priority is to satisfy the customer through early and continuous delivery of valuable software.
  2. Welcome changing requirements, even later in development. Agile processes harness change for the customer’s competitive advantage.
  3. Deliver functional software frequently, from a couple of weeks to a couple of months, with a preference for shorterscale.
  4. Business people and developers must work together on daily throughout the project.
  5. Build projects around motivated individuals. Give them the environment and support they need and trust them to get the job done.
  6. The most efficient and effective method of conveying information to and within a development team is face-to-face conversation.
  7. Working software is the primary measure of progress.
  8. Agile processes promote sustainable development. The sponsors, developers and users must be able to maintain a constant pace indefinitely.
  9. Continuous attention to technical excellence and good design enhances agility.
  10. Simplicity – the art of maximizing the amount of work not done – is essential.
  11. The best architectures, requirements and design emerge from self-organizing teams..
  12. At regular intervals, the team reflects on how to become more effective, then tunes and adjusts its behaviour accordingly.

The principles outlined above can easily be applied in business, not just in the world of IT development, simply by replacing the word software with system/product.

Agile vs. traditional way of working

The traditional method of organization and delivery (also called “Waterfall”) has several characteristics, largely following the internal organization of the company, with the “product” circulating in various stages of development from one department to another, until it reaches final testing and release. The teams are therefore functional teams, the departments different, and the development is sequential.

Unlike the traditional way of working, delivery in Agile is centred around the value delivered to the customer with each iteration. Companies organise themselves into mixed teams, concentrating the specialisations needed to complete the product. This ensures that everyone is involved and up to date with the latest requirements or changes coming from the customer. The customer is involved in the development process and can intervene with changes any time during the process. At the same time, the customer gets functional deliverables early in the project, so they can start using them before the contract is finalised.

What do Agile organisations have in common?

Agile organisations share a culture where change is expected and seen as an opportunity to be more relevant in the market or bring greater value to the customer.

Developments are incremental, with each iteration building on the previous one and incorporating customer feedback. Teams are self-organising, intrinsically motivated by the desire to be useful and produce value. The customer is involved at every step and can use a simplified version of the requested product as early as possible, which still meets their most important need. Prioritisation is done according to what is most valuable to the customer and not according to the internal project organisation, which is the company’s responsibility. Working in shared spaces, face-to-face conversations and transparency at all levels are encouraged.

Beyond the exact mode of application or the Agile methodology used (Scrum, Kanban, XP, etc.), Agile is more about mindset and less about formalism.

Being Agile ≠ doing Agile

Being Agile means:

  • focus on teams – and here the adoption of the philosophy is very important to be done from the top
  • having aligned behaviours so that people feel encouraged to try new things without fear of the consequences of failure
  • have structure and clarity, clear decision mandates given to teams, transparent prioritisation criteria
  • work towards building a common purpose to which teams adhere and in which they see the importance of their work.

On the other hand, a simple Agile implementation (“doing Agile”) is the most convenient measure where you just adhere to a specific way of organising, assigning roles and following the steps in the methodology. But effective implementation without the right mindset and leadership will not yield success, but instead will create frustration and potentially even amplify internal chaos.

In the end, the only way to implement Agile is… to get started.

There is no one-size-fits-all recipe that works for all organizations. Developing the mindset is the most important, with the details of implementation chosen according to context and relevance.

If you want to:

  • transform your organisation to be more prepared to respond to the changing environment,
  • align business processes and IT processes,
  • maintain relevance to your customers,
  • respond quickly to change,
  • have empowered and performance-driven teams,

We can help. We are here to:

  • work with company leaders,
  • support you in redesigning your organisation,
  • advise you on implementation,
  • train and coach your teams on their projects