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How agile methods can give you a competitive advantage

Where agile meets agility: how to use agile methods to adapt a more effective business model in changing working environments

In the 21 years since a collection of software engineers composed and put their names to the Agile Manifesto, there is hardly a major company around that has not adopted some aspect of agile working methodology in its own business.

Most think they have, but few haven’t quite achieved it.

Getting it wrong can spell disaster. Take the example of the Nokia phone company, which was sold to Microsoft in 2014 after a spectacular fall from grace.

Julian Birkinshaw, professor of strategy and entrepreneurship at London Business School, notes that the Finnish firm’s sales and tech teams saw changing consumer demands and had smartphones with touch screens in prototype form, but the key decision makers at the centre were the last to know. The outcome was anything but agile.

The story of Nokia’s once world-leading mobile division flags several important aspects about achieving corporate agility, according to Birkinshaw, who advises organisations of all stripes on how to use agile to become more efficient and responsive to their customers and markets.

“Agile is a very good way of pushing the train faster down an existing track but if the train needs to change direction and get onto a different track, heavy investment in agile is unlikely to provide that,” he says. Instead, that requires “heavy duty bottom-up and top-down investment asking where are we going, why, and what are the difficult choices required in that?”

These are big conversations, which are best done in person. “I’m a great believer in agile, allied to a face-to-face work environment where people get to kick around these big strategic questions about where they’re going next,” Birkinshaw says.

He also warns that remote working makes it harder for front-line intelligence to pass up the chain of command. “Companies have got to induce their employees to move towards a hybrid working week whereby they are actually in the office two or three days a week,” he says. But this is easier said than done.

Remote control

The coronavirus pandemic saw many businesses forced to adapt working from home practices, and after two years remote working is firmly embedded in Britain’s corporate culture.

Simon Wingate, managing director of recruiter Reed, believes employers should be encouraged to “remain open-minded to the virtues of remote working, not least to keep their recruitment options open in a competitive labour market.”

The challenge of finding talent is highlighted by February’s Office for National Statistics figures which showed 1.3 million job vacancies, which Wingate notes is a record.

“It [has] shifted from a buyers’ to a sellers’ market where workers hold the cards,’ Wingate says. Reed’s own research shows that flexible hours have become the second most important motivation for staff after pay (31% versus 53%).

In fact, so prized is remote working that a third of us are prepared to countenance a cut in pay in return for having it on a permanent basis. So how can firms stay truly agile and on top of their game with the trade-offs imposed by fully remote or hybrid working?

One answer from agile consultant Karim Harbott, author of The Six Enablers of Business Agility, is the stark observation that the ability to collaborate is more important to enterprise agility than talent in specific work tasks. That’s true of fully virtual, or hybrid or face-to-face teams.

In any event, Harbott, a former software developer and Scrum master, believes much of the in-person agile activity can be replicated online from using Zoom or Microsoft Teams to virtual whiteboards and group messaging software like Slack.

His critical assessment, though, is that it’s not deficiencies in team working that are the biggest barrier to innovation and agility in businesses, it’s usually the businesses themselves.

“Most people focus on processes, practices, frameworks and tools – this is your scrums, your kanbans,” he says. “What I’m saying is you can’t worry about those things until you’ve created the organisational operating system for those things to work.”
The organisational operating system requires the right leadership style and culture, the right team structures, as well as the “right enabling and empowering HR policies incentivising individualism, not team-based collaboration.”

Once that has been achieved, you then need the right governance in place. The hard part is changing leadership style, in going from “micro-managers, command and controllers to a more enabling leader” who will “safely decentralise decision-making… knowing that people will go in the direction you want them to go and do the right things.”

Volatile times

If the pandemic has shown us anything, it is that business leaders don’t have a choice in the change of working practices. The way Harbott sees it, the advent of remote working is not the main business issue highlighted by Covid-19.

“For me a bigger game changer has been realising that the world is more changeable and more volatile than we previously thought,” he says. “Business models need to change as well as ways of working and that has been the game changer, those that can evolve their business model to survive the pandemic rather than those who can evolve their working practices to survive the pandemic. Because working practices are actually easy to evolve, business models less so.”

Here is the point where agile meets agility, how a methodology and its successful application to your business can make all the difference.

According to Harbott, the prime challenge is “the tools and techniques that work for running a business as usual don’t work for creating new products, services and business models, ”because it is known and unknown. It is about execution, experimentation and learning.

First, we have to accept that these are different skill sets, requiring different cultures and frameworks within which to develop new products and services for customers. That means different people with different skills working under different working conditions are the leaders of innovation.

“They are often held back by bureaucracy, so we need to put in place just enough bureaucracy to keep us compliant and safe and minimise risk, but not so much that it stifles that innovation,” Harbott says.

Next you need to accept failure, but you need to know how to fail cheaply and quickly. “And then roll those things out and double down on the things that are showing promise,” he warns. Try this under command and control and “if your governance process says you need to pick the right one and execute it, you’re likely to efficiently execute against the wrong thing.”

CEOs, he concludes, must understand who in their organisations is keeping the lights on with business as usual, who is creating tomorrow’s products and have different metrics for success on each side, as well as a different culture.

They must remember that research and development isn’t throwing money around.

“You [need to] give it time, energy and attention to create the infrastructure, to educate senior leaders so that they understand innovation as much as they understand execution, and then you can start to step back.”

In other words, create the system, culture and structure for your staff to agile in and let the magic happen.

“Your people on the ground will create the ideas and build the business models,” Harbott says. “Steve Jobs didn’t come up with the idea for a phone, in fact he wanted to do something else. His team convinced him, and that’s the way we need to go.”