Agile, at its core, is an organizational workflow and management practice. It enables empowerment of the team over bureaucratic authority and allows an organization to take control of their product strategy in the face of rapid change; much easier said, than done. Agile requires little paperwork, but a lot of discipline. In order for a company to succeed with Agile, it requires discipline based on a solid understanding of Agile methods throughout the organization.
Change and disruption are the realities for companies competing in the 21st century. Just when an organization believes it has built a competitive advantage is when that organization needs to plan its next evolution. This is highlighted with Yahoo’s recent struggles. Yahoo was the first internet portal and pay-per-click search marketing engine, but they lost the race to Google. Now Google is looking at Facebook and is very concerned.
There are two very critical models in product theory. Model 1 is the S-curve as seen below:
The S-curve models the lifecycle of a product. Margin is made and market domination is built at the take off stage. As a product goes to maturity, the number of competitors’ increases, price erodes and margins dwindle. Agile methods in practice, allow a company to embrace change and operate in four to six week cycles. This operating mentality opens the business up to flexibility and agility in the face of a dynamically changing environment.
This capability is critical in handling product disruptions. If you have successfully managed a product through ferment into takeoff, disruption is an ever possible reality. A disruption makes the current product basically useless and either moves the market back to ferment or puts a “different” version of the product at the takeoff stage. (Perfect example of this is what happened with HD-DVD verses Blue Ray). If an organization is using Agile methods, they have a much greater chance of “seeing” the disruption because of the communication between departments that Agile requires. If the disruption is missed until impact, an organization using Agile can much more quickly retool and change to meet the disruption. Agile allows this based on the 4 to 6 week “sprint” development cycles and the consistent updates and reprioritization of the product back log.
Model 2 is The Critical Elements of Product Creation:
Successful products are developed based on an organization’s ability to understand these three elements. In traditional software / product development, the business teams understand value creation and competitive understanding and the development / engineering teams understand the organizational capability. Many times, when the two teams are out of alignment, opportunities are chased which are outside capabilities. Real opportunities are then missed because the business didn’t know what the organization could do.
Agile methods bring the business team into day to day contact with the development team. Not all day contact, but contact. This increase in the number of conversations allows more straight forward information sharing and basically makes capabilities become transparent. As capabilities become transparent, the business team opens its “eyes” to great opportunities and the development team opens its “eyes” to its deficiencies based on market demands.
Product strategy today has to revolve around change. Gone are the days of an eighteen month product development schedule or a locked down product roadmap. Agile was developed to empower teams and companies to meet the demands of a change on products and solutions. The methodology is successful because it demands participation from all aspects of the organization, not just development. The participation demanded is not excessive, but it is consistent. When executed with precision, an organization can truly align business with IT and gain a competitive advantage.