Business Must Become Agile or Be Left Behind

How 7 Agile Concepts Make Better Business Practices

Every time I read an article that declares “Agile is Dead” I roll my eyes. The reality could not be further from the truth. In this ever-changing business climate your company will need the ability to move forward with limited information and pivot quickly to survive into the next decade.

The concepts in agile, particularly scrum, have relevance far beyond the Engineering and IT departments. In this post, I’m going to briefly cover 7 scrum concepts and how those concepts can be modified to run your business with agility:

  1. Organize Effective Teams
  2. Rethink Business Planning
  3. Write Better Business Requirements
  4. Execute Business Plans in Shorter Business Cycles
  5. Practice Continuous Improvement
  6. Measure Velocity
  7. Practice Transparent Status Reporting

1. Organize Effective Teams

The Engineering and IT departments have known for years that they can no longer develop software applications in isolated silos. Both traditional and agile development teams have members from multiple technical disciplines, such as programming, business analysis, data analysis, quality assurance, security and architecture. They understand the importance of engaging the right mix of technical talent to design, develop and test an application.

Why has this common practice remained isolated to the technical side of the business? Why do Finance and Accounting, Sales and Marketing, Product Management, Human Resources and all the other myriad of departments continue to work in silos?

Every year, businesses plan to achieve specific corporate objectives, then each department develops its own set of strategic plans to achieve those objectives. What if those departmental strategic plans conflict with each other or create duplicate expenses?

If the execution of strategic plans is vital to achieving corporate objectives, then businesses should organize blended teams with the skill sets required to achieve them. Cross-functional teams increase creativity and synergy. Why would any business want to continue working in silos? Those businesses who get this concept can become leaders in their industry.

2. Rethink Business Planning

High-level strategic plans cover the fiscal year, with key milestones and metrics measured either monthly or quarterly. Success metrics are numeric. Numbers can be manipulated. It happens all the time.

Agile changes the focus from numbers to delivering value to the customer. Isn’t the customer our main focus anyway? If companies organize around strategic plans and those strategic plans provide value to the customer at lower cost, the tactical plans could break down each strategic objective into concrete deliverables that provide added customer value throughout the fiscal year. Meeting deliverable timelines should be the true measure of success.

We could take the agile concept of Epics, which are high-level use cases, and apply them to business strategy. For example, if a business has the strategic objective to attract a new target market, the team could break down the objective into discrete business deliverables: new avatar of the ideal customer, new content that speaks to that customer, new variation of the product that attracts the target market, new marketing campaigns, new sales personnel, new targets for increased sales.

After all the strategic Epics have been defined in terms of business deliverables, all those deliverables could be organized into a strategic plan for delivery at specific milestones, in much the same way application and product development teams plan for releases.

3. Write Better Business Requirements

Every strategic business deliverable is probably made up of several small deliverables that must be completed by members of the cross-functional team. If business borrowed from the agile concept of user stories, each small deliverable could be defined in terms of business requirements (what needs to be accomplished) and acceptance criteria (how we know we did it right).

If we look at one of the deliverables above, new content that speaks to the customer, we probably need to write multiple types of content, such as content for the corporate website, social media and print advertising. Requirements for each content type should be documented in the form of a story that includes acceptance criteria with specific language that speaks to the avatar of the customer.

Do you have to know the detailed requirements and write stories for each type of content at the beginning of the fiscal year? No. But you do have to identify the high-level Epics, break the Epics down into business deliverables and set milestone dates for each deliverable. You should have some idea how long each deliverable takes, so stories are written and approved with enough advanced notice to give the team time to complete them.

4. Execute Business Plans in Shorter Business Cycles

Just like with agile scrum, the sooner you deliver business value and get it in front of the customer, the better chance you have to pivot if you’ve made an incorrect implementation choice. Instead of quarterly reviews, if businesses could practice monthly reviews as part of their month-end close, then the teams could report status more frequently and small problems could be addressed before they become big problems and the team misses a strategic milestone. If the team misses an objective, then the business does not achieve its corporate goals.

Evaluating the results of concrete business deliverables adds transparency to the status of team plans and strategies to achieve corporate objectives. If a strategy is not working, pivot and try something else. Write new stories for success. If a team needs help, reorganize and regroup.

5. Practice Continuous Improvement

The scrum retrospective is one of the most powerful concepts that should be adopted by all business teams. Conducted at the end of every monthly business cycle, retrospectives provide the team with an opportunity to review what when well and identify areas for improvement. The team reviews each problem area, brainstorms ideas and votes to adopt the best process changes.

Make small business process changes, before small issues become big impediments. Teams that are empowered to make their own choices about how they work together, work better together.

6. Measure Velocity

What is velocity? It’s a measure of how many deliverables the team can deliver in a business cycle.

This means that business stories must be groomed and sized, just like any other agile scrum story. Before bringing a story in for work at the start of a business cycle, the team should review it for completeness and assign it a relative size.

Simple tee shirt sizing works great. The key is to stop thinking in terms of hours to completion and start thinking in relative sizes like Small, Medium, Large and Extra Large.  If a story is Extra Large, try to break it down into smaller deliverables. Finally, assign story points to each size. A Small could be 1 story point, a Medium could be 3 story points, a Large could be 5 story points and an Extra Large could be 8 story points.

The idea is to plan for and bring in the right amount of work in each business cycle. After about 5 months, if team size remains constant, velocity should be a good predictor of how many deliverables the team can produce each month and whether or not the team has the capacity to achieve its objectives.

7. Practice Transparent Status Reporting

When you know the team’s velocity, you can size each business deliverable and roll that up into an Epic size. Status reporting against corporate objectives becomes more transparent.

If you know the total story point size of an Epic, then you can compare that to the total number of story points completed. The percent complete at the end of a business cycle gives upper management a concrete indication whether or not the team is on track to achieve its corporate objectives. Those numbers are not easily manipulated.

Wow! You can see how agile concepts apply to all aspects of business, especially corporate strategic planning.

Want personalized instruction?
Then come to our next GSD Scrum Training or call us for a consultation.

 

Cynthia Kahn

Cynthia Kahn

Cynthia Kahn
CynthiaK@gsd.guru  503.799.5500

 

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