Chapter 16: Continuous Improvement – Agile Productivity Unleashed, 2nd Edition

CHAPTER 16: CONTINUOUS IMPROVEMENT

Become better – or become obsolete

At the very start of this book, the following challenge was put forward to readers: how is your organization going to sustain its current business processes and practices in an ever-increasing high-technology global marketplace? Organizations that want to survive (and thrive) in a rapidly changing marketplace need to focus on continuously improving the way in which they do work.

It does not take an enormous crack in your organization’s business process pipeline to cause it to burst. Even small leakages can lead to compounded issues in the long term.

Everything about Agile approaches is designed to provide continuous improvement for the organization:

  • The high-communication, business-value-driven prioritization and team-driven estimation activities in iteration planning sessions can ensure that the delivery team is continually focused on delivering the highest business-value outcomes for the organization within allocated time, budget and resource constraints.
  • Daily stand-up meetings, pairing, co-location of delivery team members, refactoring, velocity checking and five-minute retrospectives all encourage the delivery team members to focus on continuous improvement within each iteration.
  • The outcomes review sessions and retrospectives when the work is completed, encourage continuous improvement between iterations.

The time, cost and resource efficiencies that Agile approaches deliver are compounded by the improved results that they can generate for the organization:

  • A high-quality product or service that more closely aligns with a customer’s requirement does not just save your organization from having to do rework, it can encourage repeat customer sales with minimal opportunity costs for the organization to absorb.
  • A business process that was made more efficient through the use of refactoring can produce ongoing savings for your organization every time that process is used.
  • Motivated and satisfied employees can reduce turnover rates, which not only saves your organization from the overheads of acquiring and training new staff, it also encourages people with the strongest corporate memory – including hands-on experience in making Agile approaches work within your corporate culture – to continue to apply their knowledge for the ongoing benefit of the organization.

Continuous improvement benefits are able to be delivered by a range of Agile approaches, from employing lean techniques in order to optimize your business processes (see Chapter 13: Waste Management), to changing your corporate culture in order to create a work environment that encourages high quality (see True quality requires a culture change in Chapter 14: Constantly Measurable Quality), through to using retrospectives to continually review and improve the work that is being done by Agile teams (see Chapter 15: Rearview Mirror Checking). Any one of these approaches alone can protect your organization from running out of time, money, resources and customer good will as you grow to meet the ever-increasing global demand. All of these approaches combined can position your organization to achieve real productivity gains that will keep you well ahead of the competition as market demand evolves.

One step back – five steps forward

Taking the time to implement Agile approaches – with minimal upfront costs – can position the organization to receive exponential returns. Adopting and using Agile approaches within your organization is likely to require:

  • Strategies to convince decision makers to endorse these approaches.
  • Initial overheads in training and equipping your staff to apply Agile practices and techniques most effectively.
  • A culture change that moves the organization from knowledge silos and passive quality checkpoints to high communication, responsive planning, lean techniques and quality-driven processes.

It is for these very reasons that the adoption of Agile approaches will not happen overnight. Even if you are fortunate enough to work for an organization (like BT) that is willing to mandate the shift to Agile approaches across the organization, there will be additional time required to get employees familiar (and comfortable) with these practices. For most organizations, however, the adoption of Agile approaches is likely to be a slower process where the success of individual Agile projects gives others in the organization the confidence to try these approaches within their own areas. This ‘grassroots campaign’ strategy can eventually result in the broader adoption of Agile approaches across the organization, but you need to allow time for the grass to grow.

In the Exponential returns on your quality investment section of Chapter 14: Constantly Measurable Quality, it was identified that Agile approaches can position an organization to achieve high-quality outputs without a significant upfront investment, which means that the ROI equation can be resolved quickly – enabling the subsequent benefits of Agile approaches to become pure gain for the organization. This assertion does not just apply to the benefits of high-quality outputs; it equally applies to the benefits of having more efficient business processes, a more responsive corporate culture, greater employee retention and a more satisfied customer base. Once Agile approaches are in place, the infrastructure needed to sustain these approaches is relatively small (mostly ongoing staff education and resource allocation to participate on Agile teams).

Added to these benefits is the fact that there is a groundswell of resources available for Agile teams to learn from the community of Agile practitioners who have been refining these approaches for the past three decades (see More Information on Agile for a list of these resources). So, even the costs of ongoing staff education can be reduced by leveraging the expertise (and generosity) of others in the Agile community who are working together to improve these processes for all organizations.

All of this means that introducing Agile approaches within your organization can be a relatively low-cost activity with significant ongoing returns. Perhaps the most important return for the organization, however, is not the reduced overheads or increased profit margins that the organization can achieve; it is the resiliency and sustainability of the organization to grow – and thrive – in changing market conditions.

Regular review and adjustment

The aspects that make responsive planning so effective in meeting changing stakeholder needs are the same ones that make continuous improvement techniques so powerful as market conditions evolve. In a static market, the regular review and adjustment of business activities is a mechanism for ensuring that work is being done as efficiently (and effectively) as possible. In a dynamic market, the regular review and adjustment of business activities is a necessity to ensure that the organization is continuing to meet market demand.

In a world where technology is growing in dog years and the physical barriers that used to impede global trading are rapidly being torn down, annual reviews of the organization’s performance will not suffice. Most organizations are strategic enough to keep a close eye on their competitors, to monitor industry trends and to try to predict (and plan for) changes in market behavior. Yet, how many of these organizations are equally diligent in ensuring that internal staffing levels and business processes are in a position to support these changes? What if these changes do not indicate potential increases in the levels of work that the staff is currently doing, but the likelihood of long periods of downtime, or shifts away from your organization’s core activities? Are your internal resources equally positioned to be productive in a lower demand period, or to retrain staff skills (and retool equipment) to support a changing market demand?

Continuous improvement techniques are designed to provide an organization with pulse point checks of the work that is being done against the most current information in the marketplace. This means that indications of increasing market demand can be adapted to in small increments, instead of mad dashes to hire more staff. It also means that indications of decreasing market demand can be addressed through normal staff attrition, instead of mass layoffs.

The Agile approaches detailed in this book (such as direct stakeholder engagement) do not only provide organizations with a mechanism for keeping a finger on the pulse of the market; they equally provide organizations with tools (such as lean techniques) to adapt internal business processes and work practices to accommodate the results of these pulse point checks – and with techniques, such as refactoring, that create simpler, more efficient business processes that can minimize the overheads in making these changes.

Quantifying and measuring improvement

Throughout this chapter, the terms efficient and cost-effective have been used to describe the benefits that continuous improvement techniques can bring to an organization. How does the organization quantify and measure these improvements, in order to both confirm that they are achieving the intended results, and to use this information to acquire ongoing executive support for these techniques?

The Measuring cost/benefit section of Chapter 6: Business-value-driven Work provides a formula that organizations can use to assign a cost-driven expected business value to each planned actionable goal, in order to assign it a relative priority against other goals that are competing for the same resources. A similar approach can be used to measure the business value of previous work activities against improved work activities, by applying the following steps:

  • Baseline: in order to measure comparative improvements, the organization needs to assess and record the business value of work activities prior to the introduction of continuous improvement techniques. This snapshot represents the baseline for future comparison.
  • Isolate: to the largest extent possible, the organization needs to isolate the work activities being measured against factors in the organization that could also impact these activities. For example, an expected reduction in staff due to scheduled vacation leave.
  • Apply: once the targeted work activities have been baselined and isolated from other factors in the organization (to the largest extent possible), the organization can then apply the proposed continuous improvement techniques to the targeted work activities.
  • Measure: after a pre-determined period of time, the organization can then use the business-value formula to take another snapshot of the targeted work activities and compare relative business values using the applicable KPIs (overhead costs, net profits).
  • Repeat: as continuous improvement techniques are regularly used to improve ongoing work activities, the same formula can be applied at regular intervals to measure the ongoing business-value impact of these techniques.

Organizations can use an equivalent approach for estimating the business-value impacts of proposed continuous improvement changes using predictive analysis. In this situation, the baseline is taken, using the current work activities, and the measurement is against models for proposed future changes, which can be documented through the business process modeling described in Chapter 13: Waste Management.

Bringing it all together

One of my most favorite quotes is the following observation from George Eliot:

It is never too late to be what you might have been.

Everybody has the ability to improve, no matter how old, or how set in their ways they are – and organizations are no different.

Section 3: A Case Study demonstrates the impact that implementing Agile approaches can have on business value generation for organizations in every industry, including the most traditional ones.

Section 4: Making Agile Work in Your Organization provides pathways for any organization to trial Agile approaches, from the most change-averse established organizations, to the most forward-thinking new start-ups. This section includes:

  • A workflow tool to guide you through selecting the most appropriate Agile approaches for your organization’s activities
  • Guidelines for introducing Agile approaches within your organization, and
  • Tools for your organization to actively apply, manage and track the effectiveness of these approaches.

The key to Agile success is to start by selecting and implementing the most effective Agile practices and techniques to suit the specific needs of your organization, and, then, focus on continuous improvement, so that the ongoing value of these approaches can be adapted to suit the evolving needs of your organization.

Describing the benefits of Agile approaches on paper can be valuable, but seeing the power of Agile approaches in action is far more compelling. The best way to illustrate both the power and the value of Agile approaches for every organization is to compare them side-by-side with traditional business approaches, using common business scenarios that organizations in any industry sector can appreciate.

The following section provides a composite case study of two competing pharmaceutical companies that need to prepare for the launch of a new product that they are offering. Each pharmaceutical company has to build a product website, make consumers aware of the website and fulfill customer orders using the same budget allocation, and the same number of employees, in the same timeframe. One company uses traditional business approaches to achieve these objectives, the other uses Agile approaches; and the two companies achieve vastly different results.