Plan to Adapt – Part One

January 26, 2014

As I covered in Chapter Two’s The Depth of Agile discussion (in the What is Agile Development? post), agile is built from a foundation of Lean and Learning Organizations. Focusing on the business is one way of categorizing the values, principles and characteristics that serve as our foundation. Conceptually, the Business category is one pillar of what will be a House of Agile that has a common foundation:


Figure 3-10

The House of Agile is a model to act as a guide for reflection and conversation. By focusing on one pillar (I’ll add more in upcoming posts) we can ask ourselves what it means to be agile from that perspective. If we consider what it means to be agile in a larger business context from that of a development team, a couple of questions come to mind:
  • How do we plan, budget and govern our strategic initiatives to maximize ROI from an agile perspective?
  • What fast, cost-effective, lightweight techniques can we use to improve our decision-making on what to pursue from a strategic perspective?
We want to avoid is building a product based on speculation because it is extremely wasteful to build the wrong thing the right way. This happens all too often already; roughly three-quarters of the money invested in product development work results in products that do not succeed. (Christensen & Raynor, 2003)

We need an efficient, effective means of validating our direction before making that investment to build a production-ready product. We need to fail learn fast so that we improve the odds of success when we place our bet and build that production system.

This means that our definition of success should not be about building the best possible plan up front, let alone striving to conform to that plan. As General Helmuth von Moltke once said, “No plan survives contact with the enemy.” (Helmuth von Moltke the Elder, 2014) In business, we need to contact our prospective customers as early as possible and discover a plan the works. (Reis, 2011)

We need to collect ideas and concepts and shape them, being prepared to adapt based on what the market and our prospective customers are telling us. Until we learn from our customers, it’s all wishful thinking. Just as product development teams need to adapt to maximize value, and a macro level a business needs to adapt, just as one of the four values of The Agile Manifesto states: “Responding to change over following a plan.”

How do we track and manage ideas and concepts as we learn and shape them? And how do we improve the odds of success?

Visual Management
The first thing that can be done is to manage work visually. I’m not talking about managing projects, not yet. We need to make informed decisions about what to invest in at a high level before ramping up a project. At this stage we need to engage in idea management where we can collect, investigate and prioritize ideas and concepts. From there we can put plans into motion to make these ideas a reality.

A task board can be leveraged to provide a high-level overview of work in process and its various states from concept to cash, or light bulb to live, whichever expression works for you. The objective is to visualize progress as we collect ideas, shape them and turn them into a reality. An example board is shown in Figure 3-11, which of course can be tailored to meet your own needs:


Figure 3-11

We begin with ideas that are dropped into the Backlog. These ideas are subsequently Investigated where they are discussed, refined and analyzed to determine what will provide the greatest value to the business that is in alignment with vision and mission of the company, the level of investment that is possible and the organization’s appetite for risk. As approved concepts are moved forward in the portfolio planning process they will be prioritized and queued, Ready for work. We can also track what is being worked on at a high level by moving items to the In Progress column, finishing with the Done column when the work is complete.

The expectation here is that all of this work remains at a fairly high level, keeping in mind that we want our product development teams to continually refine the solution to maximize value as they ultimately work towards customer delivery. Agile organizations remain responsive and adaptive at all levels.

Ideas themselves can come from a variety of sources, using various techniques: suggestions by employees, customers or prospects, brainstorming sessions, business partners, etc. that I won’t cover here. Once you begin collecting ideas, most companies find that they have more ideas than they can possibly pursue. However, the goal is to grow your business, and it is helpful to use some tools to put those ideas into context that will help you to discuss and evaluate your options.

Growing and Competing
One useful tool to categorize and evaluate your options is the Ways to Grow matrix from IDEO’s Diego Rodriguez and Ryan Jacoby (Brown, 2009):


Figure 3-12 Ways to Grow

The most explosive growth comes from a revolutionary approach in the upper right portion of the quadrant: the creation of an entirely new market. This doesn’t happen every day, and is the riskiest and the most expensive route to pursue.

The predominant innovation activity is at the lower left of the quadrant, which is incremental in nature. This can help retain customers, with the potential of increasing what those existing customers are paying for as value is gradually added to a product over time. And given enough incremental activity, your product can slowly evolve to attract new users/customers.

More robust growth is realized through evolutionary growth by stretching a little more in either direction, by either extending an existing offering to solve unmet needs of current customers or adapting an existing offering to meet the needs of new customers.

To balance and track activity by category, you can add swim lanes to your task board inclusive of setting work-in-process (WIP) limits set to the overall the capacity of your organization to manage and work on items (as determined by the columns) and to balance the overall portfolio activity based on investment guidance and risk tolerance (as determined by the rows, or swim lanes):


Figure 3-13

I’d like to make one more point about adapting and existing offering that is worth noting in an agile business context. Your product (or service, for that matter) doesn’t have to be what is adapted. An alternative is for you to find a way to provide your product at a lower cost that will open up a new customer segment or market.

In an agile business where we are continuously learning, improving and adapting, we need to guard against rejecting ideas solely on the basis of a cost-benefit analysis. Something may not be worth doing based on your current state, but consider this: What would your reaction be if a competitor began offering a similar product or service to a lower-end customer segment that you had previously ignored? Would you be worried?

The danger is that your competitor is gaining experience and expertise servicing a lower-margin portion of the market, but at some point in time they will want your higher-margin customers. And their ability to operate successfully in a lower-margin market will place them in a great position to compete with you.

The implication is that you shouldn’t use a cost-benefit analysis as a binary go/no-go switch based on where you are today, but instead it should be used as a vehicle for adapting and improving. Toyota is famous for this. If there is an option available that looks out of reach right now, start asking yourself and your organization what it will take to achieve that new, ambitious target condition that will make you even more competitive. (Rother, 2010)

Adapt or Die!
Adapting – adapting quickly – is an important quality in today’s turbulent business climate. For example, it has been reported that the average life span of an S&P company has decreased from 50 years to fewer than 15, trending towards 5 years. Why? Here are a couple of reasons: Competitive intensity has more than doubled in the last 40 years, and customers are less brand-loyal today than ever before. (The Shift Index study by Deloitte's Center for the Edge, 2014)

No one can afford to be complacent, market leaders included. We need to unlock the creativity and engagement of everyone in order to navigate uncertain territory effectively and efficiently. Running an agile business is all about linking what to do and how to do it in the most efficient and effective manner.

I’ll continue to cover more tools and techniques for running an adaptive agile business in upcoming posts.


This post is a draft of content intended for an upcoming ebook: Agile Expectations: What to Expect from Agile Development, and Why. Blog posts will be organized under the “Agile Expectations” content on the left-hand side for easy reference. I welcome your comments and feedback! – Dave Moran

Bibliography
Brown, T. (2009). Change by Design . New York, NY: HarperCollins Publishers.

Christensen, C. M., & Raynor, M. E. (2003). The Innovator's Solution. Boston, MA: Harvard Business School Publishing Corporation.

Helmuth von Moltke the Elder. (2014, January). Retrieved from Wikipedia: http://en.wikipedia.org/wiki/Helmuth_von_Moltke_the_Elder

Maurya, A. (2012). Running Lean: Iterate from Plan A to a Plan That Works. O'Reilly.

Reis, E. (2011). The Lean Startup. New York: Crown Business.

Rother, M. (2010). Toyota Kata: Managing People for Improvement, Adaptiveness and Superior Results. McGraw-Hill.

The Manifesto for Agile Development. (2001). Retrieved from The Agile Manifesto: http://agilemanifesto.org/

The Shift Index study by Deloitte's Center for the Edge. (2014, Jan). Retrieved from Deloitte: http://www.deloitte.com/us/shiftindex

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