Having trouble with Agile?

Get a new CFO

If you’re having trouble with ‘agile’, get yourself a new CFO.

I’ve worked in a bunch of companies, big and small, and seen Agile fail in any number of situations. More specifically, I don’t think I’ve ever seen it succeed systematically in a large company (bar a couple of renegade teams operating outside of the norm). And I worked at the company that claimed to have introduced the UK to SCRUM. The reasons behind this are nearly always the same, and have very little to do with technology.

First, a quick recap. If you know exactly what you want to deliver before you start out, you’re in trouble. Certainty is the enemy of any agile methodology, and there’s the rub. Companies don’t like uncertainty, or more specifically they don’t like it in IT. They love it in marketing, where $$$ are committed with little or no idea what the output might be (“increased brand awareness” FTW).

This is partly because of the way in which companies account for their expenditure, hence the title of this post. Marketing typically comes under operating expenditure (Opex), and is accepted by the business as a cost of doing business. If it costs $10m to run the marketing department for a year, that’s what it costs.

Building things, however, is a capital expense (Capex) and typically goes through a whole world of pain before approval. In a large company this usually entails documenting, in advance, exactly why you want the money, what you’re going to spend it on, what the expected payback will be, and the date by which you will be finished.

In case you missed it, everything in that sentence prevents you from being agile.

This distinction (Opex v Capex) comes from a different era - pre-internet. Back in the day, IT projects were capital investments - huge warehouse system replacements, or SAP integrations - or even replacing the OS on 10,000 desktops (hence IE6's lingering death). These were one-off projects digitally akin to building a new store, or buying a new fleet of trucks. They had defined outputs, a calculated ROI, and most important of all - were never meant to change from the day they were delivered to the day they were replaced (plus minimal support).

This model is totally inappropriate for the web - and explains why so many large, traditionally-run organisations struggle with software delivery - they are still looking for the defined outcome. If you want to evolve at ‘web speed’, and really be agile, then you need to throw out the preconceptions, and embrace uncertainty - which is enough to make most accountants hide in a cupboard clutching their abacus.

The answer is to make web development an accepted part of ‘the cost of doing business’, and to be reclassified as Opex; which in turn means that you need to have a CFO/FD who understands that the job, like marketing, is never done. If your CFO doesn’t get this, and you have to capitalise all web development by way of discrete, funded, projects - then you’re never going to achieve that agile nirvana. Sorry.

PS If you are in this situation, your hands are tied, and as such the last thing on earth that you need right now is an Agile Coach, unless you’re looking for something to punch.