4 reasons why you should embrace Agile, the smart way.

07 July 2021

Agile provides many benefits that add up to an appreciable impact on the overall financial performance.

author picture Article written by Claus Fjelding Whitt

Agile. It’s everywhere around us. Agile has gained a lot of traction since its inception back in the 90’s. And with bigger and faster changes now facing organisations worldwide, it is more than ever before under the spotlight. Agile methods are further expanding beyond software development to go enterprise wide. Transformations of this magnitude span multiple organisational dimensions at once: strategy, structure (networked teams), processes (fast learning cycles), people (empowerment) and (cutting edge) technology.

But as adoption keeps growing, some ask whether we are taking it too far. If you feel pressed to jump into the Agile bandwagon, here is a cold, hard look at its business impacts[1] to help you decide. Should you embrace and fully scale Agile? The answer is in the numbers. However, here is the thing: speed isn’t everything.

Top 3 reasons why organisations choose to go Agile enterprise wide

How do organisations usually justify the move to Agile[2]? The most frequently cited reason is to increase speed of delivery (PROSCI 2021). But we’ll come back to the potential downside and pitfalls of “rushing it” in a few minutes. Moreover, Agile owes much of its success to the fact that it advocates a customer-centric approach to better respond to shifts in demands. Going Agile is often a way to improve customer satisfaction by increasing alignment with clients’ needs. Better responsiveness also implies greater flexibility, a third motivation to “systematically adopting Agile as an enterprise approach” – along with its capacity to optimize efficiency.

Does Agile live up to the expectations? Let’s take a deep dive into the data and explore what McKinsey has coined the “Agile Engine”, a powerful combination of 3 mutually reinforcing benefits.


4 data-backed reasons why they are right

Agile provides many benefits that add up to an appreciable impact on the overall financial performance, which gets a boost of 20 up to 30%. That is what a recent study by McKinsey (2020) has highlighted. Better customer satisfaction, employee engagement and operational performances are the 3 main outcomes of a successful agile transformation (or “Agile engine”)[3] … and solid arguments to go down the Agile route.  

30% increase in terms of customer satisfaction. Agile can generate big wins as it shifts the focus from external competition to the client. With fully accountable teams in the driver’s seat, Agile minimizes delays and shortens the time to generate and validate value propositions. It crushes an otherwise extremely lengthy and arguably frustrating – process by cutting the number of drafts going back and forth between multiple silos.

20% to 30 % increase in terms of employee engagement. This is a top-selling argument. No matter what you do, getting people fully on board is everything. As cross-functional squats with full end-to-end accountability replace traditional hierarchy, Agile drives higher engagement rates. And it does so in three ways. First, it fosters a sense of autonomy. Second, Agile promotes and recognises mastery and technical skills. And, last but not least, it infuses a solid sense of purpose with clear goals and missions assigned to squads.

30 to 50% increase in terms of operational performance … even if it might first decline before rapidly shooting up as people start to settle into their new working routines. Greater clarity of purpose and better team dedication lead to higher development/delivery speed (time to market) and target-achievement-rates. Whereas most organisations fall short of reaching their goals, those who have implemented Agile boast of impressive achievement rates within the range of 90-140%.

Save and reinvest. Overall, Agile substantially improves financial performance. These benefits translate into internal and external cost savings (20 to 30%) to be reinjected in future ventures.  

But beware of the pitfalls

As it happens with anything popular, the biggest risk is to simply follow along for fear of missing out and to apply a one-size-fits-all approach.

Concerns voiced by high-profile experts have a lot to see with the consequences of moving forward too fast, an easy trap to fall into in the case of Agile[4]. Agile cannot be an excuse to avoid “careful planning and preparation”, especially when it comes to dealing with the people side of change (see below). Nor should it place arbitrary constraints on what to develop, as people just “go with the skills they have”. At the end of the day, it could hamper growth and ambition, as people understand that Agile is all about incrementally improving something that already exists. And so coming up with your own flavor to Agile to fit the context i.e leaving more time for ideas to incubate and fully develop into a vision – requires conscious deliberation.

All set to go fully Agile? Then you will have to dedicate time to prepare for the cultural and mindset shift it entails. Agile should be treated as a change on its own - and a substantial one for that matter. A major pitfall is to forget that organisations per se do not change. People do. Long-lasting results derive from the sum of successful individual transitions. As an approach also strongly reliant on empowered teams and people, Agile takes solid Change Management plans … and a lot of work upfront. Embarking on the Agile journey presupposes that people are aware of the risks of the status quo, truly desire to revamp their working routines, are equipped and able to operate in a different framework.

Speed might be an essential component of agility, but it should be understood as an outcome of optimised processes, structure, strategy, teamwork, and technology. Not as a call to skip the basics. Agile can make a big difference … if implemented right. Our next blog will deal with the nuts of bolts of deploying Agile, the smart way. Stay tuned!

[1] This article builds on the results of a survey conducted by McKinsey (2020), Agile: Buzz or Business Impact? [online] 

[3] The following paragraphs describe the "Agile Engine" as put forward by McKinsey (2020), Agile: Buzzword or Business Impact?

[4] Bryar C. and Carr B. (2021), Have we taken Agile too far? Harvard Business Review. [online] Have We Taken Agile Too Far? (hbr.org)

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