The rise of agility and the MVP: from buzz words to advantages and risks to organizational design, long-term strategy and vision

o Mahmoud
o Mahmoud
Sep 8, 2018 · 7 min read

The rise of agile methods and concepts have accelerated due to companies such as Netflix, Spotify, and Amazon enjoying high attention through their ability to disrupt markets. Their capability to adjust their product portfolio according to changing customer habits and hidden customer needs is a main driver for their success. Traditional companies have been forced to change their approach in order to keep up with their disrupting competitors.

Two years ago, I understood “agility” as a buzz word used to explain either irrational decision-making or not having thought through an idea. However, I have changed my opinion as I had the opportunity to experience the results on my own.

Benefits often associated with agility are innovation, lower costs, and lower time to market. However, agile methods are facing risks as well, particularly owing to the organizational design of companies and their long- term strategy.

Agile is not a buzz word that justifies being chaotic

In a traditional (waterfall) setup, most of the time is spent in the concept phase, while the customer is only involved at the end of the project. In our current fast-paced environment, this approach can result in a high risk: that the development does not suit the customer’s needs anymore, which can result in sunken costs.

In an agile project, you go through phases (understand, research, ideate, prototype, and validate). Each phase has a set amount of time and targets (sprints). The dedicated resources (people and budget) determine the problem or area they want to tackle. Depending on the magnitude of what you want to do achieve, the length of the phase may vary; for example, understanding the problem might take you one, two, or more sprints. After each sprint, the results/findings are reviewed and discussed jointly. The planning of the following sprint takes into consideration the result of the previous one.

With limited resources and a set amount of time, the planning of the sprints plays a critical role. Agility is the opposite of being chaotic because of the limited resources and the fixed amount of time it takes to plan. Additionally, the main benefit is to adapt according to the results of previous sprints.

Agility possess a risk to the organizational design

During my time in the UK, I became a vivid fan of Domino’s pizza. Once in a month I would go to Domino’s and grab a pizza. While waiting, I was observing the incredible throughput the team was able to achieve. It was fascinating to see how the team was able to adapt to peaks by avoiding bottlenecks.

From my observation, I have noticed that there was more than one person who prepared the dough: one was putting on the sauce/cheese and, depending on the time, the other or a handful of others were putting on the individual toppings on the pizza. Whenever the process got stuck because of a bottleneck, the previous person would step in and help out (the dough maker would move on and put the sauce and cheese on the pizza).

In classical projects or in classical matrix organizations, the result of a project is the sum of parts/pieces of work done by separate functions, often at the same time rather than just one part of the work being done by one at a time. E.g. suppose the marketing department comes up with a plan which is eventually handed over to another team (such as the finance department) so they can build upon it. Finance would validate its viability through a business case. Depending on its workload and priorities, the project might take longer, since the actual workload is not being determined by the length of the project but rather its priority and availability of resources.

In an agile setup/project, the key to being able to react and adapt are the resources needed to be dedicated to the project. The benefits are obvious: the throughput depends on the actual workload and does not get impacted by priorities or resource allocation.

In order to achieve fast/new outcomes, it is necessary to have a diverse team; diversity in this case means not only having team members from different backgrounds which enable them to look at a problem from different perspectives and come up with unusual new solutions, but also having diverse views in terms of relevant functions in order to be able to speed up otherwise bureaucratic processes.

While the availability of key resources in an agile project teams allows you to be faster and able to adapt to changing circumstances, it is a risk to the organization as a whole. In comparison to necessary skills at Domino’s pizza in large organizations, key resources are only interchangeable to a certain degree. If a key resource is a bottleneck resource within the company, the dedication to an agile project team possess a high risk on other projects where this resource is needed.

One of the major challenges I currently see in agile project teams is how they recruit and staff teams while balancing the utilization of key resources or niche expertise. If you recruit based on current needs, an optimal utilization in the future might be a burden cost-wise to the organization. Dedicating a key resource, however, might delay other projects and impact the company as a whole. The problem becomes even more important when you start scaling the agile approach.

MVPs can negatively impact long-term strategy/vision

The rise of agile teams and customer centricity brought also MVPs with it, which challenged traditional product development and creation. In comparison to classical product development, you do not create a perfect product with a full-feature set. MVPs are products or services which have the most important feature in order to be able to gather customer feedback.

Creating a MVP is a drastic change to traditional product development. Instead of developing a perfect product with a whole set of features, the major or core feature is developed and tested together with the customer. This lowers time to market, as developing a product with its full-feature set or having the product fully integrated into corporate systems and processes can be lengthy. There is also the risk that, and at the end of this lengthy process, the product might prove not to be relevant to the customer anymore. The development of a MVP does not only help you to focus on the main problem that you want to tackle, but it also helps to you to refine core features of the product by going through a loop of iterations with customers and making adaptions based on their feedback.

However, there is another risk with this approach. The results of the tests with customers need to be evaluated differently. Traditional metrics might tell you how many customers have used the product or service. If you have a lucky punch, no further justification is needed. When it does not succeed, the product or service should not be abandoned, but rather needs understanding as to why it was not accepted by the customers and adaptions are needed.

Let’s take McDonald’s as an example. When McDonald’s implemented a new system of touchscreens to order and pay instead of lining up in front of the cashier, the new approach was initially not accepted and the company had to put a lot of effort to show people the benefit of the new approach. After educating people, the new approach was accepted as it had a lot of benefits for the customer and for the company. The customer does not have to queue up to order food and Mc Donald’s has been able to shift resources from the cashier machine to the kitchen, which allowed them to provide fresher products. If they would have developed a MVP and measured success by the number of people who have used the system, the results would have shown that it should not be implemented due to low usage.

The benefit of a MVP is the reiteration loop, which allows you to gather customer feedback to redefine your product. The most critical part of this idea is to uncover the problem or need that you want to solve. But most importantly, it is crucial to understand why it was not accepted by the customer in the first place. One has to be careful of the results and its impact on long-term strategy and vision.

In a fast-paced environment with changing customer behavior and taste, the tactics currently being used in the market today are not suitable. It is about those who are able to adapt and innovate who do not get disrupted. Agility is not just a buzz word; the benefits mentioned previously are undisputed (the speed to which you are able to adapt to a consumer’s need, the avoidance of sunken costs through reiteration loops, and the involvement of customers) and are changing the mindset within traditional organizations. But there are also disadvantages when applying agile concepts incorrectly: there might be negative effects on other projects due to the dedication of bottleneck resources to agile teams. The testing with customers might lead to negative results when using traditional metrics, which can lead to the abandonment of innovative ideas and therefore affect the company’s vision and strategy.

Welcome to a place where words matter. On Medium, smart voices and original ideas take center stage - with no ads in sight. Watch
Follow all the topics you care about, and we’ll deliver the best stories for you to your homepage and inbox. Explore
Get unlimited access to the best stories on Medium — and support writers while you’re at it. Just $5/month. Upgrade