What It Means To Operate Using An Agile Model
We hear the word ‘Agile’ used a lot these days, but what does it actually mean? We look at what an agile model really looks like and how to go about using one.
Agile doesn’t mean startup. Agile originated from the startup communities, given that it is a word more often associated with software development and product discovery lifecycles, measured in days or weeks, rather than months. These concepts are often bundled into ‘Lean’ thinking; again, made popular through the startup community.
However, this doesn’t mean large businesses have to adopt a short-term startup mentality or insist on dress down days and meetings taking place on beanbags or around ping-pong tables! Agile, in a corporate environment, is about achieving ‘the triple A advantage,’ based on Accenture research:
1. Cost Cutting
This starts with cost savings, but only when leaders know where to cut costs and where to re-invest. How do agile businesses make this decision? Accountability and visibility at every level; knowing where in an organisation costs are generating a return, and where they aren’t. These savings can be taken out of budgets and into areas where they will increase revenues, efficiencies and profits.
Maintaining fiscal discipline is as important during lean times and times of plenty. It can be too easy to relax and incrementally increase costs without generating enough of a return to justify larger budgets, only to get caught by surprise by more agile upstarts and competitors. Especially now, when digital has reduced the barriers to entry for markets which were previously safe from digital disruption.
Agile management and a financially lean approach are two sides of the same strategy. Both ensure companies have a competitive advantage in turbulent and changing times.
Agile businesses also make it very easy to ensure teams are working collaboratively; much like a startup, when teams are usually small enough that there’s no choice. It is far too easy, in larger companies, to make collaboration a painful and pointless process.
Often it is the interims engaged by an organisation that can do this most effectively, since they don’t have departmental budgets to defend, internal professional rivalries and reputations to worry about. Agile companies don’t allow those kinds of deadweight issues to get in the way of growth and new product/service development.
Innovation happens when your staff can come together, independently and solve problems. Employees who sit in silos don’t get to see how they have an impact on customers or revenues, which means not everyone gets to make an input when they have something to contribute. Vital talent is wasted. Collaboration unlocks the potential of your entire team, resulting in an innovation mind-set permeating your organisation.
The approach works best when everyone contributes, rather than it languishing in management inboxes and long-forgotten PowerPoint presentations.
Don’t leave your employees confused in thinking the new way of working means anyone can throw ideas into a hat and get get a team and a budget. That isn’t agile management; in some ways that’s closer to early-stage startup accelerators than how corporates should function when they’re trying to deploy agile operating practices.
Avoid confusion. Communicate. But communicate with actions first, and then a vision, once elements of an agile initiative are in operation. Companies that make a big song and dance about “new agile initiatives” are often the least successful when it comes to getting team buy-in. Instead, adopt elements of how startups function, which is to test a theory in a ‘live environment’ first, and then roll it out across the organisation.
Not only will this avoid management getting proverbial egg on their face, but agile will be easier to demonstrate when a company is already benefiting from this in practice.
Deploying Agile Models to Increase Competitive Advantage
We have broken this down into a checklist for organisations looking to deploy an agile approach from an operational perspective.
Agile businesses adapt quicker, are more responsive to customer trends, market convergence and instead of fearing digital disruption, they actively drive it forward. Their methods get them closer to their customers. Shrinking product/service lifecycles don’t scare them and destroy profit margins: Instead, they ready themselves for when popular products and services get replaced, through innovation.
These companies always seem one step ahead, because they are. It doesn’t mean they need to be small or adopt a startup mentality: it means they deleverage themselves from too much risk, large cost-bases and inefficient practices. Staff are more engaged; they want to do better because they’re being challenged and have a sense of purpose. Agile isn’t about reacting; it is about driving growth and innovation forward, to increase profits and market share.