There has been a lot of press about agile businesses, but what’s it all about? Agile is a move away from the traditional business hierarchy, and we’ll discuss that in more detail in a moment.
In this article, we’ll be looking at successful businesses that utilize the agile framework and how they have benefited from this method of operation.
Let’s begin with a look at what agile working means and why it will become prevalent in the near future.
What Is Agile, and Why Is It Important?
What is agile? Agile is not a new thing; it’s simply a method of business operation that differs from the traditional upper management, middle management, and teams of staff way of working we are used to.
It came about in the software development industry and has transferred to other areas of commerce and industry.
Agile is about responding quickly to changes in the market, something which is commonplace nowadays largely thanks to the digital elements of just about every business.
Agile is about responding in real-time to new competitors and moving forward when needed in the market. There are five aspects of an agile company that differentiates it from standard working practices, these being:
- An agile business features a ‘flat’ management structure. Managers are hands-on rather than delegators.
- They are flexible regarding the use of resources and strategy.
- They will be dedicated to experimentation and fast learning.
- Agile businesses encourage mobility in the roles of all employees and embrace entrepreneurship.
- Agile businesses keep up to date with the latest communication technology for more effective feedback.
The above should give an idea of why agile is being adopted in many different areas of commerce and industry, including IT, where it is of particular importance.
Let’s have a look at some examples of businesses that have switched to agile with beneficial effects.
What Are Examples of Businesses Using Agile?
There are many business agility examples, given the rise in popularity and proven performance benefits of this method of operation, so here are a few good examples:
- Cargill Inc. is a major food producer and distributor with 150,000 employees in many plants across the world. They recognized they were failing to engage and motivate their staff and launched an investigation as to why. They moved to agile with what they called ‘everyday performance management.’ This embraced the principles of agile in terms of fast reactions, constant feedback, and role mobility. A survey following some time working under the new framework saw 70% of staff say they felt more valued by the company, and a similar number commented that the feedback they were given was of use rather than mere criticism.
- Global giant General Electric was notorious for its employee ranking system. This saw all employees ranked by performance, and the bottom 10% were basically sacked on a regular basis. In 2015 they saw that this was an outdated and unfair system and went agile. They began by scrapping the performance ranking and instigating a system whereby staff set goals and management would help them reach them.
They also introduced an app whereby staff can be given and give feedback and put in place an open-door policy where any staff member can request a one-to-one with management at any time. The result improved productivity considerably.
- Clydesdale and Yorkshire Bank is another example of a business moving away from performance ranking and towards improved teamwork. Teams now set two goals to achieve in each quarter, and individuals are the same, and they are mentored towards these goals. The previous system was ‘all process and no productivity while the new one uses feedback and conversation to improve productivity.
The above three examples are typical of many companies around the world that are slowly recognizing that encouragement and flexibility are the way to improve performance.
However, all admit that there are great problems in implementing an agile framework.
The problem is that of resistance to change, especially in the middle management area, which is effectively removed from the platform. Now let’s check out a couple of IT companies that have implemented agile with great success.
Do IT Businesses Use Agile?
It is perhaps fair to say that any successful IT business will now use an agile working system. Here are two well-known examples.
Software giant Adobe recognized that its annual appraisal and performance ranking system was cumbersome, time-consuming, and paperwork heavy. It also puts up barriers to teamwork, creativity, and innovation.
In 2012, they decided to scrap the system completely and work with a new agile framework that involved regular management and staff ‘check-ins’ for performance monitoring.
They have since cut voluntary staff turnover by 30% and saved over 80,000-man-hours in needless work.
Major IT company Accenture used a ‘forced ranking’ system that it began to recognize pitted individuals against others in different roles.
Interestingly, they also found that the employees who were ranked highest were the most ‘narcissistic and self-promoting and not necessarily the best performers.
This system was scrapped, and they introduced a system of ongoing performance conversations that encouraged improvement.
The above two examples are very much redolent of the way 21st-century management methods are going, and not only in the IT and software industries.
As we have seen with Cargill, agile is finding its way into production and logistics, and we also have an example in the world of finance.
Agile in Software Development
Going back to the origins of agile takes us to software development and why the new framework came into play.
Traditionally, software development used a ‘waterfall’ framework in which one area was completed; then the team moved on to the next (that’s a very basic and general description, but it should give you an idea of the difference between waterfall and agile.)
With agile development, different teams work on different areas of the project but constantly communicate, so experiments that fail are still an educational process that may be brought back to life in different forms.
This allows for faster turnaround times, greater innovation, and for the individuals to know they are valued and their contribution is important – all core values of agile working.
We have seen from the above that agile is not a fixed format. It is a broad umbrella term for a type of working framework that eliminates the old-fashioned traditional hierarchy and encourages those further down the ladder to contribute and develop.
It is the way forward for commerce and industry in the 21st century, and we will see many more businesses adopt an agile framework over the coming years.
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