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The promise of business agility

Published January 15, 2024
by Stephanie Ockerman

What does it mean to be agile?  Why do we want to be agile?

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These are important questions.

Through my training and coaching experiences, I have come to realize that many people do not know what business agility means and why it matters.  The main focus is on the team-level practices like visual work management, burndown charts, and pair programming.  At the same time, the entire organization focuses on trying to translate the old way of working to the new way of working in terms of methodology, processes, job titles, and measures.

This does not work.

Without a clear vision of where we are trying to get to and why we want to get there, an agile transformation or a team-level implementation quickly falls apart.  We end up just going through the motions and trying to survive.  Ultimately, we don’t achieve substantial benefits for all of our effort and pain.

Then we say that agile doesn’t work.

Agile doesn’t work or not work.  Agile is a state of being.  So let’s first address what it means to be agile.

Agile is a mindset based on a set of values and principles.  Agile is also a movement, a group of people working together to advance these shared values and principles.

The ultimate goal is to achieve business agility.

This is our why.

It should be clear up front, and it should continue to be emphasized and evaluated.

How do we know if we are achieving business agility?  I look at three factors in defining business agility, and they are related.

  • Factor 1:  Are we seeing a return on investment soon enough?
  • Factor 2:  How much flexibility do we have in making investment decisions?
  • Factor 3:  How quickly can we take advantage of opportunities or respond to risks in our market?

Let’s dive in to each of these factors.

Business Agility Factor 1:  Earlier return on investment.

Businesses care about return on investment (ROI).  Any initiative, project, or product we want to fund requires a discussion on the expected ROI.  This is because businesses have to choose where to invest their people and resources, which are usually limited.

By delivering some features and functionality to our users sooner, we are able to earn the value sooner.  Now we can do something with that return.  This leads us into factor two.

Business Agility Factor 2:   Flexibility and control of our investment decisions.

When we are able to measure our actual ROI, that information can help inform decisions on whether or not it makes sense to keep investing.  Maybe we need to shift direction based on what we are learning.  Perhaps a new opportunity has come up elsewhere, and it makes sense to shift our investment right now.

The longer a business has money tied up in an initiative without seeing any value from it, the less flexibility and control it has over investment decisions.  This leads us into factor three.

Business Agility Factor 3:  Taking advantage of opportunities and responding to risks.

Maybe it is a new market.  Maybe it is a new revenue stream.  Maybe there is a technological breakthrough.  Maybe there is a change in how our world exists.  Maybe it’s keeping up with the competition.  Maybe it’s a new security concern.  I could go on.
If businesses are able to easily shift their money and their teams to focus on new opportunities or risks quickly, that may be the ultimate competitive advantage in this ever-changing, unpredictable world.

Scrum is a framework to enable business agility.

Scrum’s focus on having a potentially releasable Increment every Sprint gives the business the flexibility to release that Increment if desired.  This provides a quicker return on investment and helps inform decisions about whether or not to keep investing in the initiative.  If the business chooses to release, then it can validate if the original assumptions about value and ROI were correct.

The business can choose to keep going down the path of investing in this initiative or product, or the business can choose to pivot and invest its money and teams in potentially more effective ways.  A pivot does not cause a lot of waste or sunk cost because we have limited the investment to a Sprint, and the Increment can be released.  In other words, value can still be realized.

The Product Owner can change and re-order the Product Backlog to reflect new opportunities or new risks.  Every Sprint the Scrum team creates a new plan based on the current state of the Product Backlog.  This gives the business the ability to change direction every Sprint.

This is why Done is so important in Scrum.

This is how Scrum helps realize the promise of business agility. 

If you are working in an organization that is adopting agile practices, start a conversation with your peers and leadership to see what business agility means to them and why they think it’s important.  I would love to hear what you learn and how this helps you move forward.

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