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Michael Hugos, principal at Center for Systems Innovation [c4si], writes, speaks and consults on strategies for IT and business agility and mentors development teams. He spent six years as CIO of a multibillion dollar distribution cooperative developing a suite of supply chain and business systems that transformed the company’s operations and revenue model. He won the CIO 100 Award and Premier 100 Award for his work. He’s author of several books and writes an online column for CIO magazine called “Doing Business in Real Time.” We recently met with Michael at the Agile 2010 conference, which resulted in “Agile is Ready for the Enterprise” and sparked the idea for this blog post.
Rally asks: What issues and trends are you seeing across technology departments, development teams and in discussions with CIOs?
Michael Hugos answers: The example set by companies such as Google, Facebook and Netflix shows how companies can use iterative development to continuously enhance products and grow market share. This is being noticed by business and technology leaders in other companies and they are asking if they can do the same thing to drive development in their own companies. People realize that IT is right down the middle of everything a company does, and that traditional software release cycles of once a year, or even once a quarter, are not able to keep up with the pace of change and innovation these days.
Just like the word “athlete,” the word “Agile” grabs your attention; it sounds great. But moving from desire to reality always tests peoples’ commitment. A lot of companies are struggling with the all-too-common reaction of, “That’s not the way we do things here…” Agile approaches are interesting and fascinating to companies, but then there is the tendency to immediately criticize new ideas – we’re all prone to it. As soon as someone suggests a new way of doing something, we all think of 10 reasons why that can’t be done or why it won’t work.
Rally: What is driving enterprise adoption of Agile?
MH: To begin with, agility is no longer just a good idea; it’s now backed by law – the law of probability. This law says if a company can’t keep up with rapid rates of change in the world then its probability of success is getting smaller and smaller every day. And since companies need IT infrastructure and applications to operate, just as our bodies need a nervous system and muscles to move, IT agility is critical for a company to achieve business agility.
In the last few years, software tools have enabled executives to measure and track progress on Agile projects and to see the performance of Agile teams in widely dispersed geographical locations. That makes Agile methods more feasible for large companies. A pervading feeling exists throughout business that just about everything else has been tried and IT groups are still not really keeping up with the backlog of user requests. Users are starting to go around IT and do their own things using SaaS, social media and mashups to put together systems. So why not give Agile a try?
Rally: How do Agile methodologies help large organizations foster, regain or accelerate the pace of innovation?
MH: Agile practices offer the best way to improve communication and collaboration between business and IT. Meaningful innovation always starts with communication and collaboration. Another thing that Agile practices enable is the ability to try out new ideas and explore opportunities quickly without investing a lot of money up front. With more traditional approaches, companies invest a lot of time and money planning up front before they start something new. This is expensive. And since most new ideas don’t pan out in the end, this traditional approach makes it difficult (if not impossible) for companies to try out enough new ideas in a year to find that small handful of ideas that do work out and deliver the profits they are looking for.
I like to say that in this high-change and unpredictable economic environment, companies need to: “Think big, start small and deliver quickly.” That’s the best way to keep up, adapt and respond to change, and find the opportunities they are looking for. Agility means letting go of slow, deliberate decision-making in favor of quick, repeatedly-tested decisions. That’s why Agile methods are so appropriate for energizing companies and helping them develop innovative products and services.
Rally: How do you make a case for Agile and address the fears of risk-averse CIOs, CTOs or CEOs?
MH: First, I remind executives of something that has become a fact in the last 10 years: business operations and technology are so tightly intertwined that there is no meaningful distinction left between the two; you can’t do business without technology. That might seem obvious to many but, executives who have been around for a while (like me) may still remember the days when IT was just a back office operation.
Once people acknowledge this reality then I point out that, over the last 10 years, Agile practices have been thoroughly field tested and have an impressive track record for delivering success. There are software tools now, like Rally and others, that address Agile project management and reporting, business and IT collaboration, software testing, and the continuous integration of new software with existing systems infrastructure. So going Agile is not just a leap of faith anymore.
Agile is actually a better way to manage risk versus using traditional waterfall approaches. With Agile practices, big projects are divided into lots of smaller projects that build on each other. This enables people to employ short feedback loops, learn quickly and change plans in light of new information. Two of the biggest causes for failure in business and failure in new development projects is that companies have no inexpensive way to investigate new opportunities, and they blindly follow predefined project plans without change – even as the world itself keeps changing.
The IT profession is at a turning point: one group of IT practitioners has learned that agility is the way to go, but more traditional practitioners still call it radical. Yet, the traditionalists continue to apply the same old ways of doing things that result in the same old horrendously expensive, multi-year projects that produce systems barely better than what was there before, if they even work at all. More and more business executives are coming to the conclusion that the effective support of business agility is the main reason for their company to have an internal IT group. Otherwise, there are options now to just outsource IT operations to cloud computing vendors and get new applications from SaaS providers and social media.
Rally: What does the future hold for Agile and Lean development practices?
MH: Probably the biggest change will be analogous to what happens when a company grows and transitions from an entrepreneurial startup to an established business. When this transition happens, there is a need to become more pragmatic and less idealistic. In the Agile world, this means that “Scrum-but” will actually be the best way for most companies to adopt Agile methods. Each company will customize versions of Agile that best fit their needs and it will be some combination of practices from Scrum, XP, Lean, Kanban, etc. Even waterfall practices have some benefits which should be incorporated where they make sense. Agile practices will not be set in concrete; they will continue to evolve over time as companies learn more and the world keeps changing.
Another big change for Agile is the realization that Agile development is not an end in itself. The value of IT agility is its ability to drive business agility. In the end, agility is more about business than about IT. Instead of co-locating business people with development teams, we will embed IT people in business operating units and co-locate development teams with business people.
I talk about this in my most recent book Business Agility: Sustainable Prosperity in a Relentlessly Competitive World. Agile companies will become real-time organizations that use IT to drive a process of continuous focusing on and responding to opportunities and threats. They will employ IT to drive three continuous feedback loops that make their real-time operations possible. The first feedback loop (I use the Yin-Yang symbol), provides awareness of a changing environment and identifies threats and opportunities. The second loop (I use a sunflower because of how it constantly adjusts itself to follow the sun across the sky), provides balance and continuously adjusts existing operations and processes to fit changing circumstances. And the third loop (I use the leaping panther), provides agility in the sense that it is how companies create new processes and products to seize new opportunities. The figure below illustrates this.
Matt Phillips is a Senior Project Manager who has spent the last few years helping shape the Agile development process at 
Do you notice a difference between problems and difficulties? A problem has a solution. When engineers solve it, the problem goes away. It’s a question raised for solution with fixes, tests, and checklist updates. In contrast, a difficulty has no solution. A difficulty wants you to sit with it, address it, not solve it. Artists know this world of the difficult very well. No definitive fix, test, or checklist will suffice. Sitting with and playing with the difficult is simply part of the knowledge work of the artist.
