When to Be Agile and When to Be Lean
Within the corporate world, a prevalent misconception is the belief that Agile methodology is a cure-all for every efficiency challenge. This view overlooks Agile’s primary suitability for the discovery phase of projects rather than for enhancing operational efficiency. Such a misunderstanding often leads to misguided efforts and unrealistic expectations regarding Agile’s capabilities. In contrast, some companies continue to rely on traditional management approaches even in the discovery phase, inadvertently hampering the innovation and flexibility crucial at this stage.
My understanding of the distinct yet complementary roles of Lean and Agile methodologies evolved significantly after reading the book “Lean Enterprise.” This book was instrumental in filling a critical gap in my perception, particularly in understanding how Lean principles can effectively dovetail with Agile practices. It became clear that while Agile excels in the exploratory and adaptive aspects of projects, Lean provides a framework for continuous improvement and efficiency in more operational contexts. This realization helped me appreciate the nuanced application of both methodologies, depending on the specific phase and needs of a project, thereby clarifying the misplaced notion of Agile as a universal solution.
The book highlights that startups begin by exploring new opportunities through business model innovation. They seek a new model aligned with the founders’ purpose, adding value to customers and driving the organization’s profitability and growth. Once found, the model is explored, growing and scaling it while finding ways to reduce costs, improve efficiency, and increase market share and customer base.
The crucial point is that management practices effective in the scale domain may lead to failure if applied to the exploration of new opportunities, and vice versa. Therefore, the differences between these two domains are crucial.
In summary, discovery should be agile, while scale should be Lean. When the goal is to discover something, such as a new product or business model, the practice should be agile. After discovery, the practice should be Lean to scale and explore what has been discovered.
The problem with the word “agile” is its association with speed. While not entirely wrong, it is essential to understand that the speed achieved with agility is the speed of learning, not the speed of delivery at scale. For this, the work system must become Lean, streamlined, efficient, without waste.
At the beginning of the journey, companies (startups) must be agile to discover the Product/Market Fit. Subsequently, they must become Lean in pursuit of growth, delivering more and more of the same value to diverse customers. The key is that the speed desired by already profitable organizations is in Lean, not in Agile. However, there’s a catch:
To become Lean, you need to be agile
Hold on, I’ll explain!
Lean can be a means, but it is also an end. To become Lean, companies need to invest in the continuous improvement of methods, practices, processes, and tools. Since all of this is context-sensitive, there is a discovery process over time. The organization discovers its methods, practices, and the best use of its tools through agile experimentation, often resulting in failures when trying to implement practices from different contexts.
Disordered growth, without continuous improvement, leads organizations to become bloated and slow. Some opt to adopt Scrum in an attempt to become “more agile,” but after this article, I hope they understand why this is misguided.
Over the years, I’ve had the opportunity to assist countless teams in becoming more productive. All of them claimed to be using Scrum, even without a Scrum Master. However, that wasn’t their main issue. The primary problem was their frustration with failing to accurately estimate the tasks for the Sprint. Beyond a few misunderstandings of Scrum, many of these teams needed Lean more than Agile. Their products were already well-established in the market, and they needed to evolve their work methods to increase productivity.
Finally, I emphasize that the book proposes that organizations adopt scale and discovery strategies to remain competitive in the long term. While seeking to scale the current business, organizations should engage in agile initiatives to discover new products and business models.
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