Edited and prepared by Oscar Michel, Masters in Journalism, DCU
Great guest post by Mitch Beaumont, Ben Thuriaux, Prashanth Prasad, Chandler Hatton and Colin Davies from Global Management Consultancy, Arthur D. Little.
For the past two decades the information technology and software world has been applying the agile approach, a highly dynamic innovation model. As a result the software industry has consistently produced patents at three times the level of the next-most prolific sectors. Today, agile approaches are increasingly being deployed alongside phase-gate processes in engineering and R&D functions outside software, also with positive results. Arthur D. Little’s eighth Innovation Excellence Survey reveals that companies that have successfully added agile methods to their toolboxes, and tailor their breakthrough innovation approaches by the type of innovation, perform significantly better than those that stick to the traditional waterfall/phase-gate approach.
Key aspects to an agile approach
Iterative approach. The heart of the agile approach in product development is the use of a series of rapid, iterative loops, similar to an agile iteration for software. At the early “exploration” stages of the development lifecycle, each loop focuses on answering a key question that is determined to have a high degree of importance and uncertainty, in order to build a progressively clearer picture of the desired solution. Through these loops, the team is effectively building the user stories. A key artifact of each typically two- to four-week loop is a prototype used to test the part of the concept in question. Prototypes need to be fast and inexpensive – simple mockups, models, videos and simulations are appropriate. Prototypes are shared with a sampling of customers, the key questions tested and the learnings assessed to determine if the team can move on to a new objective for the next loop.
Teams. Clear roles and responsibilities and the right balance of authority and accountability are important for team success in an agile product development environment. Teams must be nimble and the individual members comfortable with ambiguity and experimentation. In the product development environment, agile teams are multidisciplinary teams of specialists that expand and contract depending on their current focus. This would be different from the skills needed to do a technology-feasibility loop. To support this model, agile product development teams are often put together with part-time or limited-time resources. A very small “core” stays constant, and there is a designated team leader throughout the development cycle.
Governance. While governance is not often identified as a key element of agile software development, it is critical within product development. In the agile environment, governance acts less like a go/no-go decision-maker and more like a coach to project teams. Governance also serves to mitigate “organisational antibodies” that try to impede or marginalise breakthrough innovations. Loop reviews done at the end of each loop to assess whether the key question has been addressed are discussions between project teams and their governance, using poster boards, prototypes and other visual aids to facilitate the conversation. To enable this environment, it is important that an agile governance group is comprised of individuals who can foster a culture of experimentation and learning, a sense of urgency and agility, and a passion for helping teams jump over hurdles (versus governance being the hurdle itself).
Agile alongside phase-gate
The phase-gate and agile approaches are distinct in their implementation, and generally suited to different innovation objectives when applied in the context of companies with engineered products. We see companies adopting two general approaches when trying to introduce agile into an existing phase-gate process: integrating agile into a single innovation process and adding a partly parallel agile path.
Integrating agile into a single innovation process typically involves using iterative loops within the existing phase-gate process, but with the overall structure retained as-is. Our experience is that attempting to integrate approaches will sub-optimise at least one of them. A better solution is to run them side by side, so an organisation can apply the right approach across an innovation portfolio of both incremental and breakthrough innovation. In this model the agile path is the right size to handle the anticipated flow of breakthrough innovation as per a company’s particular innovation strategy, which is usually substantially less volume than the phased path.
Breakthrough innovation is increasingly important for companies. However, outside of the software industry most organizations, especially those with complex engineered products and longer development lifecycles, struggle to deliver it systematically. This is principally because the agile approach needed to realise breakthroughs is a challenge to the established practices that have served them well.