Innovation Trends

Scaling Agile

I have been fortunate enough to attend tons of talks, conferences, webinars, and happy hours on “agile” over the last few years, and this week was no different. Our friends at Rally Software hosted a discussion on scaling agile, and inevitably, the conversation turned to the challenges in bringing the single team success to the rest of the organization, especially when those organizations are building complex products that need to be delivered faster, with higher quality and in environments with extreme levels of uncertainty. The successful launch of a deeply integrated product can’t rely solely on one team being agile, or simply your software division being agile; it requires multiple independent and interdependent teams across the entire organization following the key principles of agile. Value “people” (don’t call them “resources”) and interactions over process and tools, focus on collaboration, understand your market and build an atmosphere in which you are able to quickly respond to change.

We heard a few examples where it appears these tenets were not followed.

The first was looking at the top two GPS manufacturers in the world and what happened to their stock price when the iPhone first came out, when the first GPS app came out, and then again when Android launched its first turn-by-turn navigation app. It was amazing to see the rapid decline in the value of the GPS companies’ stock over a couple of short years. Those companies didn’t pay attention to the market and they were not able to quickly adjust their strategy to the changing behavior of their customers.

The second example was looking at the average live expectancy of companies on the S&P 500 and how vastly different it is today versus in the past. Dave Gray at Dachis Group actually has a great blog post about it here. Back in the late 1930s, companies on the S&P 500 had an average life expectancy of 75 years. Today, it is closer to 15 years. Companies are no longer too big to fail and in fact will fail much faster than ever before if they don’t embrace the tenets of agile. The more complex the product you’re building, the more important it is you make sure everyone is on the same page.

We have seen some great examples over the last few years of companies coming along in industries that have historically been very slow to adjust to change.  You have Nest making the thermostat exciting, driving both consumers and big energy to change their habits. Square has had to fight the bureaucracy of the old way in processing credit-card payments and is now reshaping that industry. Turner Construction is taking Lean methodologies and pushing them into construction. SpaceX recently launched Grasshopper, a reusable rocket – how exciting is that? In all of these cases, you are seeing rapid change in complex industries that recently had market leaders that were “too big to fail.”

New innovation will continue to push more complex products to market faster. We will continue to see extreme levels of uncertainty in industries that were long-thought to be reluctant to change. The leaders of yesterday are being challenged by a new breed and need to look at ways to push the tenets of agile throughout their organizations and open up the channels of collaboration. They don’t have the luxury of only one or two teams seeing success — it must be a collective success.