One thing people often get wrong about agile is that it’s an approach created by the software development community that only software developers and technology companies can use.
To say that this is wrong is a major understatement. Agile is grounded in many principles from empiricism, customer centricity, and lean management. The creators of agile had done much research on the topic. In fact, many of the agile frameworks that we use today were created by them before they signed the agile manifesto.
So let’s try to answer yet another agile conundrum… What can agile methods be used for?
Agile methods can be used for developing products and providing services in an iterative and incremental way. Though agile began as a software development movement, case studies show that companies across sectors have successfully adopted agile to become more innovative and stay ahead of their competition.
Popular case studies of companies using agile methods include:
- Software companies like Google, Spotify, Autodesk
- National Public Radio (NPR) for radio show development
- Swedish defense & aerospace firm Saab for building the Grippen E fighter jet
- Defense contractors employing agile for bidding and delivering government contracts
- Venture capital companies using Scrum to run their investment business
- John Deere using agile methods to build farming equipment
- Business units in banks doubling profitability with agile
To better understand what agile methods can be used for, let’s do a deeper dive into some of these examples.
Autodesk used agile methods to transform its core business from distributing software on CDs to selling subscriptions to software apps in the cloud.
Autodesk is an American company that makes Computer-Aided Design (CAD) software for architects and engineers in the construction sector. To stay competitive with smaller and nimbler startups, Autodesk continually improves its agile ways of work and adoption of the Scrum and Scrum@Scale frameworks.
Agile methods are grounded in the principles of empiricism. Empiricism is a philosophical school of thought according to which knowledge can only come from experience.
The goal, then, of an individual, team, or organization that’s working in agile ways, is to come up with a hypothesis — and take an economic view to test if that hypothesis is true or not. Taking an economic view means delivering the most value in the shortest time and at the lowest cost.
National Public Radio (NPR) in the US employs agile methods to create and test new radio shows quickly and economically.
Previously, ideas for new radio shows would go through an internal pitching process. Decisions which show to invest in were made by a team of executive sponsors. Once selected, a radio show would receive a big investment and go primetime.
The problem was that not all shows selected by the executes would become popular with the network’s listeners. After a $2 million dollar flop on a single show, the network decided to adopt an agile method for the creation of new radio programs. Today, NPR makes small investments in multiple ideas for new radio shows.
New radio shows get recorded quickly and economically, then get piloted with NPR’s network of radio or online listeners to determine which shows stick and which ones don’t. Only the shows that have early signs of interest and engagement get subsequent investments. In other words, NPR uses agile methods to make better capital allocation decisions in an empirical way.
In 2010, John Deere reverted to agile and Scrum as a last resort to save a failing tractor project.
“John Deere started experimenting with Scrum with a few teams in 2007. By early 2010 we had about 10 teams practicing Scrum and many more teams wanting to learn,” Chad Holdorf shared in an interview for InfoQ.
“In September of 2010, we had a product launch planned for January 2011, and we realized there was no way we’re going to be able to deliver critical new functionality without a substantial change in the way we were working. So we broke down the functional barriers, organized into agile teams, introduced scrum+ to 150+ people over one week, and went “all-in” with agile on that program.”
In 2015, Jeff Sutherland mentioned that John Deere had achieved an 800% improvement in the production of computer hardware for their farming equipment using lean principles, agile practices, and the Scrum framework. The company is known for being the first to pilot Equipment-as-a-Service as a business model, where farmers get an end-to-end service for their machinery from the moment they purchase to the moment they sell it.
Where Did Agile Come From?
Agile is not new. The agile movement started in 2001 when 17 software development thought leaders got together in a ski retreat in the mountains of Snowbird, Utah.
The group got snowed in by a blizzard. Instead of skiing, they gathered up in a room with a whiteboard and started talking about how each of them built software and managed projects with their clients.
As the members of the group found many similarities in their ways of working, they wrote them down on the whiteboard in the form of a manifesto called the “Manifesto for Agile Software Development.”
Many of the signatories of the agile manifesto had done extensive research into the principles of customer centricity and lean management. Most of the agile frameworks and methodologies that we use today, such as Scrum and Extreme Programming (XP), were formulated before their creators signed the agile manifesto.
The name “agile” comes from Agile Competitors and Virtual Organizations: Strategies for Enriching the Customer, a book by Roger N. Nagel and Steven L. Goldman, which talks about a blend of customer collaboration and lead management approaches at highly-competitive and highly-resilient hardware companies.
As Jeff Sutherland says in his 2015 talk about Scrum@Scale, “So that’s what agile is: lean plus involving the customer.”
Jeff Sutherland and Ken Schwaber created Scrum in the 1990s. The first time they presented the Scrum framework was in 1995 at the OOPSLA Business Object Design and Implementation Workshop.
Kent Beck, Ward Cunningham, and Ron Jeffries created Extreme Programming (XP) on the Chrysler Comprehensive Compensation System (C3) project, which built a payroll system for the American carmaker Chrysler.
Though the agile manifesto and most of the agile frameworks are focused primarily on software development, the roots of agile come from research into high-performing non-software companies.
As I shared in “Can You Do Agile Without Scrum?”, in January 1986, management theorist Ikujiro Nonaka and Harvard professor Hirotaka Takeuchi studied how some of the market-leading Japanese and American companies at the time had adopted a new approach to developing new products.
Nonaka and Takeuchi looked at Fuji-Xerox, Canon, Honda, NEC, Epson, Brother, 3M, Xerox, and Hewlett-Packard. In these companies, projects typically started with a goal, not a clear-cut product concept or detailed work plan. Each product team had “extreme freedom” but also had to solve “extreme challenges” — since they operated like a mini-company within the company.
The Bottom Line
Agile methods can be used for developing products and providing services in any industry or field of work.
It’s true that agile started out as a movement in the software development community. However, many companies whose core business isn’t software development and who operate well outside the technology industry have adopted an agile mindset and are using agile methods with great success.
Agile allows these companies to empower employees and create a network of self-sufficient and self-organized teams that communicate and collaborate toward a common vision, mission, and goal. Like the 800% productivity gains achieved by John Deere’s programming and engineering teams, there are a number of case studies that show the long-term benefit and impact of agile transformations.