This guide will explain how to create an agile business, and how to make an existing business (more) agile. We felt the need to create a guide on this that is different from everything else you will find online. This is because, in this guide, we will give you actionable advice, things you can actually go do, rather than fluff words “focus on the culture” and “empower your employees”.
Defining the Agile Business
Before we start, are you even sure an agile business is what you want? To make this clear, we should start with some definitions. An agile business is a business that is agile, but what does agile mean? Let’s have a definition for “agility” in this context.
Agility is the capability for a business to adapt to changes: changes in the environment, in the business context, in requirements, and in budget or resources. It is the ability to change course multiple times, and do it quickly, without losing focus.
To expand on the definition of agile business, such a business is future-proof. It is ready to move in uncertain terrains, and readapt its strategy, products, and processes as the needs change. This means being able to do that quickly, even with 180-degrees turnarounds when needed.
However, I added a key component in the definition that may go unnoticed to some: without losing focus. Being agile does not mean changing your mind every day: agility is not volatility. For a business to me agile, it means to have a clear direction and sense of purpose, but also intelligently recognize when the path to get there must change.
How to Create an Agile Business
This is the main piece of this guide on agility. Here, we see how to create an agile business, either from scratch or from an existing (but non-agile) business. It is worth noting that agility is not black or white, it is not “a business is agile” or “a business is not agile”. It is a scale, and you can always be “a little more agile”. Your job here is to assess the position of your business on this dimension and try to move it closer to agility.
Here we will present a set of tools that you can use to move your business to agility in different areas of operation.
Reverse the Iron Triangle
In a project and in any business, you need to balance three items: scope (what you want to accomplish), resources (what you want to spend to get it), and time (how soon you want it). For example, if you want to bring time down, you typically can’t without increasing resources or decreasing scope.
In traditional project management, scope is fixed: you know exactly what you want, and resources and timeline need to adapt to be realistic to get it. But what if what you want will take too long to create, and costs more than you can spend? All this would be pointless.
In agile, time and resources are fixed, and scope adapts. Agile here is “get the best out of what you already have”. This is a change of mindset, because it means “I want to do X, but I don’t have enough time”. Traditionally, you would say “let’s put more engineers on this” (increasing resources), but here instead you say “Okay, let’s do only 50% of X right now”.
If you adopt this mindset, you will be able to adapt to changing requirements, because this whole approach is about changing the requirements. And, it will also force you to bring problems in the present, or work backward starting from what you need and figuring out how to get it.
When you have the possibility to add more resources and, most importantly, to extend timelines, you get into a loop of unrealistic hope of “Oh, I did not realize it would have taken me so long. Maybe I can do this by next month. Or next 3 months. Or next year”, and eventually you spend so much time and what you wanted to create in the first place is no longer useful, and you have to drop it with all your effort wasted.
Instead, when you cannot play with resources and time, you need to think frugally. You need to think “Okay, what can I realistically do in the next two weeks that brings me value?”. And you make just a small improvement. Over time, these small improvements build up onto one another.
This first item may seem a little bit too high level and fluffy, but it is crucial. To make it more actionable in your pursuit of the agile business, we can say it in this way:
Do not allow yourself to increase time or budget for a project. Always reduce its scope instead.
Over time, this will make you perfect the art of planning, and make you deliver more value. If you need the entire scope, you will need to do a separate project for the part of the scope or deliverables you did not accomplish in the first run.
Timebox Everything
If you want to have an agile business, you need to timebox any effort you make. This work in conjunction with the “reverse the iron triangle” rule, as it is a way to limit time and resources. It is the concept of sprint that we borrow from Scrum.
A sprint is just a timebox, typically of 1, 2, or 4 weeks. Instead of working on projects continuously, you chunk your time in sprints, all of the same size. Right before a sprint is starting, you do a sprint planning session, where you commit to do a bunch of work for the upcoming sprint. These commitments should be realistic, and everything that you commit to should start and end within the sprint.
With this approach, you force yourself to decompose larger projects into smaller pieces of work, so that each piece can be delivered in a single sprint. You estimate how long it will take for each of those pieces, so that your overall commitment is realistic.
Here is a pro tip for your agile business: don’t estimate duration or effort of a task, estimate complexity instead. Give a complexity ranking to your tasks, using a Fibonacci sequence: a task can have a complexity of 1, 2, 3, 5, 8, 13, 21, 34 and so on. The reason behind this is that the more complex the task, the harder it is to estimate how complex it will really be, with Fibonacci we capture the order of magnitude of complexity and don’t waste time on unnecessary details.
The complexity of a task is intrinsic of the task itself; duration depends on who works on it as well: a more experienced person may do the same task faster than a junior guy. If you estimate complexity, overall, you can still see how many complexity points you are able to manage in a sprint, so it serves the same planning role as effort or duration. But the big advantage is this: with time, you will start to see you can deliver more complexity points within a sprint. This tool allows you to keep track of how good you are at both planning and execution: effort and duration do not.
At the end of the sprint, often together with the sprint planning of the next sprint, do a sprint retrospective. Check what you committed to do over the sprint that is ending, and see if you actually deliver it. Why? Why not? Take this as a reflection point to improve over time.
Focus on Value, Right Now
With the reversed iron triangle and timeboxing/sprint planning we introduced two important tools. But, like any other tool, you need to use them in the right way. And the way to do it is by focusing on value. This advice also seems to be quite high-level, but let’s explain this further.
Always “start with why”, whatever you do think about the outcome you are aiming for, and why that is important to you. Typically, that will be delivering something new for customers, or fixing something broken for customers. That is what we call value. Now, think how we can get this value quicker in front of the customer, even just a little piece of it, and not all.
This is common in software, where you can improve your product over time because distributing a new version to the existing customers is virtually free. But the same concept can apply to every industry. If your product has feature A, B, and C that the customers like but C is not yet ready, maybe you can start delivering a product with only A and B and make a new version later to include C as well when it is available.
There are two principles you need to keep in mind that allow you to focus on value: break down value in smaller items, and deliver incrementally. It is crucial that you break value in smaller items, and not just tasks. If you have a big thing to deliver and you break it down into 10 tasks, but until all 10 are complete there is no new value for the customer, then you are not breaking down value. Think about what is the smallest unit of value you can deliver for your customers.
Delivering incrementally is also important. You should start with a rough product that is just good enough (the Minimum Viable Product). Then, refine it and make new releases to make it better and better. What is good enough? You decide. For some companies, it may mean something sloppy that even breaks frequently. For some others, the MVP has a lot of features and high quality (think of Apple when they launched the first iPhone in 2007).
But to have an agile business, you need to deliver incrementally and thin about what is the good “size” for your MVP in term of complexity and quality.
Content over Form
The biggest leap you can do to make an agile business is to promote some “agile” behaviors. Those are the behaviors that privilege the content (what we accomplish) over the formalities we use to accomplish it.
A common example on this are organizations that have a customer support department, that tend to work with ticket numbers or case IDs. Sometimes, a request from a customer may come through email, phone, chat, or some other tools. You have two approaches there: you can tell the customer “sorry, you need to open a case through the proper channels, I can’t help you”. Or, you can go in the tool, open the case as if it was the customer opening it, support the customer and tell them “By the way, I opened case XYZ for you, here is the link to track the progress”.
An agile business does not fixate on bureaucracy. Processes are still important, and even the most agile business will have processes in place. But the process is a tool to an end, it is not the outcome. A process is never good in and of itself, it is just a way we use to deliver value to the customer. If there is a better way to do it, we revise the process, and even go off-script from time to time.
This is why you should focus on what you deliver, and never over the process itself we use to deliver it. Never focus on processes themselves, but always keep them in perspective, and you will have an agile business in no time.
Agile Business in Summary
In summary, creating an agile business is simple, but it is not easy. It requires you to adopt several practices that make you deliver value for your customer faster, and make you more reactive to changes. If you feel you want to go all the way with your agile business, you should read this guide on Agile Planning and on IT project management.
