The age of the customer
We have moved from the age of manufacturing to the age of the customer. In this new age customers have more information and more choice than they’ve had before which leads to increased expectations.
In the past, businesses spent years designing mass produced products for a mass market and selling them through mass media. This no longer works. To succeed in the modern world, businesses need to quickly design tailored products for target markets, sell via two way conversations and use rapid feedback to continuously improve.
Fast-fashion brand Zara is a great example of a company that does this. Zara is surpassing competitors by releasing new items four to five times faster than a traditional retail brand. In just five days store managers, designers and commercialisation teams work with pattern makers, in the same office, to develop a concept and prototype a garment. In just two weeks, manufacturers make several thousand garments and send them to the logistics centre in Zaragoza, Spain, and from there the garments are flown to stores all over the world. This means customers can buy the latest fashion, from design to storefront, in less than a month.
How do businesses achieve agility?
Agility is a simple concept, but difficult to achieve in practice. Behind the scenes this fast delivery pace requires autonomous, empowered and cross-functional teams that are able to collaborate and adapt quickly to ever changing needs. This is where agile values, practices, and their associated benefits come in. No longer limited to software development, agile principles and tools are being applied across all aspects of the workplace to achieve faster outcomes.
Agile is fundamentally about breaking down silos and bringing people together into cross-functional, co-located, customer focused teams that can deliver solutions many times faster than before by being highly collaborative, iterative and focused. Agile methods are now used by many companies in non-technical areas such as legal, marketing, finance and customer-service areas of online companies. Companies that practice agile include Spotify, Microsoft, Google, CBA, ANZ, REA Group and SEEK.
In practice, implementing agile involves replacing slow business processes with new ways of working. Many organisations do the following:
- Restructure their organisation so that work is done in cross-functional, co-located, client focused teams.
- Leverage visual work tools, such as Kanban boards, to provide a shared understanding of the work in progress so that teams can swarm on bottlenecks.
- Hold short, daily team meetings to communicate and identify if anyone needs help
- Use two week sprints to plan and complete work.
- Create the minimum viable product (MVP) necessary to test customer demand before investing heavily in new products.
How do businesses manage agile teams?
Managements teams need to ensure that their structure and key performance indicators reward this new way of working. Teams need to be rewarded for experimentation, learning and the delivery of business value rather than the delivery of documents. They need to know that it’s better to find out that you’re wrong with an early version of a product, than it is to find it out after huge investment of time and money.
Agile is an approach that can deliver substantial value in many areas of a business, not just software development. As we move towards an agile business future, executive, HR and marketing, to name a few, have successfully implemented agile and accelerated profitable growth.