6 business areas an Agile Operating Model impacts
The term “agile operating model” generally brings software development or high-tech engineering processes to mind, but the benefits of agile extend far beyond the IT department. At Emergn we focus on delivering value early and often, improving end-to-end flow for faster delivery and driving quality through fast feedback.
To get the real benefits, an organization must focus on optimizing the end-to-end flow of value. Every division of an organization can benefit from the key concepts of streamlined decision-making and customer-centric product or service development, but the real power is when it is brought together across organizational boundaries. After all, being faster and smarter about reviewing ideas and making decisions is always good for your bottom line.
Here are six areas of your business that benefit the most from implementing an agile operating model.
Six biggest agile benefits
1) Developing a measurable business advantage
Agile makes companies faster and more effective. If your company is iterating on ideas better than the competition, you’re going to win more customers.
2) Developing the ability to “self-benchmark” against your stated business goals
Agile is all about defining measurable achievements so your company will actually know if it’s successful. In other words, say goodbye to feel-good vanity metrics, and start looking at the numbers and cultural shifts that truly matter.
3) Having a more deliberate method of identifying the right way to progress ideas through the organization
People are naturally resistant to change, but less so if you’re introducing change effectively. Incremental delivery gives you the tools to help the organization rally behind a good idea and build momentum instead of shooting it down. If the idea isn’t good, it will get shutdown.
4) Strengthening the ability to deliver goods and services to market much faster
This one is simple — agile streamlines the decision-making process and increases collaboration. The result is less talking and more action to move products out the door.
5) Improving ability to integrate feedback
The reduced time to get a product to market allows for faster feedback from your customers, which helps you to better refine the product or service. Agile operating models give an organization the internal machinery to make quick adjustments based on feedback instead of fumbling when the first iteration of an idea is rejected by consumers.
6) Improving overall return
An agile operating model allows for more targeted products and services because of the rapid feedback it enables. Product managers are able to clearly see a better market fit for their products, and service-oriented companies see customer interactions improve immeasurably. By reducing the size of projects into smaller improvements to gain feedback from customers, the market and your own operations, you can better manage risks and returns from a portfolio of investment.
The central theme in these improvements is the holistic change that an agile operating model makes across an organization, impacting everything from project management to marketing. At their core, agile practices bring order and organization to work, allowing them to be applied universally in business.
From a human resources perspective, agile principles create an overall positive change in people’s attitudes and approach to work. The collaborative nature of agile working models improves engagement within the organization. Many managers notice a shift toward a workplace culture where learning becomes more enjoyable and interactive for team members. The end result is more customer-centric behavior. These benefits speak to how deeply agile principles can truly affect a company culture.
The international shipping company Maersk Line is a shining example of how beneficial agile can be to a company culture and business metrics. After implementing an agile operating model, Maersk saw its costs decrease by 3.6 percent despite a doubling in product releases. The company also experienced a 50 percent reduction in the time it took to bring products and services to market, and an impressive 80 percent reduction in defects.
Such benefits are very likely to be long-lasting, since Maersk has also experienced higher internal motivation, increased learning and improved relationships. Those cultural changes within the organization mean employees are more likely to invest themselves in quality outcomes that align with the company’s strategic objectives.
While the shorter-term achievements like faster decision-making processes linked to agile operating models might first attract companies, the long-term cultural shifts are bound to have the greatest impacts overall.