Knowledge Resources Logo

5 benefits of implementing Agile in tough economic times

Wilhelm Crous - Thursday, July 18, 2019


Economic downturns can present opportunities for organisations. Unfortunately, most organisations take a defensive approach in times like these and miss either the cost-saving opportunities or improved revenue generating opportunities… or both! Downturns are times of high-uncertainty and companies must be able to adapt quickly to changes in the market, consumer behaviour and the strategies of their competitors.

This is where Agile comes in. According to Rehberg and Ritter, Agile companies have proven to be two to four times faster in responding to change than traditional companies Agile companies have also proved to be more efficient in other metrics, such as:
  1. Cost control: Traditional cost-cutting measures reduce cost on average by 5% to 10%. Agile transformations don’t focus on cost cutting per se. Rather, they substantially change ways of working with the emphasis on speed and customer centricity. Thus, typically includes on average 15% - 25% cost reduction in operations.
  2. More engaged employees: Agile brings more energy and engagement. That is because it is based on the principles of employee engagement and transparency. That leads to higher levels of engagement – greater than 90% in employee surveys.
  3. Acceleration in time-to-market: The Boston Consulting Group (BCG) reports that one of the big three Financial Institutions in North America experienced a 55% reduction in time-to-market, driven largely by decreases in the upfront preparation time of 65% and development cycle time of 60%. Final integration tests and preparation for release saw a 20% reduction because there were no last stage issues and changes.
  4. Improvements in quality: BCG also reports a 50% increase in quality with an Agile approach. Self-directed and empowered teams are much closer to the action to take the necessary corrective action. It was further reported by a global media company that the average scheduled slippage was 67% less than for agile teams compared to traditional teams. 
The metrics are overwhelming in favour of Agile approaches when compared to the traditional ways of doing. 

COMMON AGILE TRAPS TO AVOID

It’s recommended that organisations should start embarking on the Agile route with one or two business units (e.g. start just with the HR department). Rehberg and Ritter however warn newcomers to Agile practices to avoid these common pitfalls:

  • Committing” to organisational change, but not making the kind of fundamental shifts in ways of working that are the basis of Agile.
  • Redesigning the organisation around Agile ways of working, while senior managers continue to do things the way they have for years.
  • Shifting some functions to Agile, while others keep operating according to the old ways or working.
  • Not following through with critical organisational enablers, such as redesigning career paths and remuneration and incentive programs. 

It’s almost clichéd to say, but it’s crucial to get the leadership team to set the pace. A key role of Agile leaders is to set and maintain strong alignment around the company’s overall purpose, strategy and priorities. Leaders will have to explain their intent, explaining both the what and the why.

Organisations that utilise the opportunity to move towards Agile in tough economic conditions, will in most cases save more money, have a greater engaged workforce as well and will outperform and outpace their capabilities.

ACCESS LOCAL AND INTERNATIONAL CASE STUDIES

If you would like to hear more local and international case studies on the implementation of Agile implementation, then don’t miss the HR Goes Agile Conference. You’ll have a chance to hear from companies, such as: Accenture, ABSA Group, Microsoft and more.

You can access the complete programme here

You will also have the opportunity to attend two pre-conference workshops:

For more information please contact Katie van der Schyff on +27 11 706 6009 or katie@knowres.co.za.

References:

Aliber, M., Hildebrandt, P., Islam, M., Jennings, A., Lenhard, E., Ritter, D., & Scognamiglio, F. (2019, April 22). Agile Works-but Are You Measuring the Impact? BCG Publications.
Rehberg, B., & Ritter, D. (2019, April 30). The Agile Upside in a Downturn. BCG Publications.


Upcoming CONFERENCES and WORKSHOPS

SURVEYS

Surveys

ABOUT US
Our Team Corporate Governance

CONTACT US
Contact Us