Why we need agile products and services now to survive in the markets of the future
If we want to talk about agility, we should first clarify what agility actually means. The term was decisively coined by the “Manifesto for Agile Software Development” in 2001. What was initially limited to the area of software development has since gained weight beyond that. Agility is on everyone’s lips today, and in the following we want to take a look at how we can make products and services fit for the coming years.
Basically, it can be said that agile organizations are based on three fundamental principles:
These capabilities, in turn, are based on lived values. These include transparency, a culture of listening, as well as a positive error culture and the participation of employees with clearly defined areas of responsibility. Another essential goal is the general understanding that there are basically no “stupid ideas”. After all, the most valuable innovations often emerge in places where they were least expected.
Why is agility so important today?
First, a review: The dominant management model in the 20th century was based on Frederick Taylor’s principles of Scientific Management. Or in short: on Taylorism. Here, the focus was on process-controlled workflows. It ensured that companies in the industrial mass production segment in particular were able to reduce their process costs through optimization and thus achieve long-term and sustainable success. Derived from this was the management model of command and control, which was based on the fundamental principle of unconditional compliance by employees with these defined processes. Employees thus became cogs in an increasingly efficient machine and managers became watchdogs over the sacred processes and their output. Efficiency, in turn, was evaluated and often rewarded on the basis of clearly defined key performance indicators (KPIs).
These quite successful principles were then also applied in the service industry and in science. And this, although they never really fit well here. Thus, the criticism of Taylorism justifiably increased the more the focus of the markets shifted away from production and towards services.
Back to the present
In almost all markets, more and more suppliers are facing fewer and fewer demanders. The markets are therefore becoming smaller and more segmented, due to a large number of different offerings aimed at the same target group. For example, who would have predicted the success of a phone without keys before 2006? Or who would have believed as recently as 2014 that an offering like Amazon’s Alexa could be a success? A machine that turns on the lights at home, commands the coffee machine, and knows the joke of the day and the weather forecast. Innovations like these, however, show just how disruptive new offerings can be in shaking up entire market segments. And above all: how quickly this happens.
Who benefits from the change?
Today, in most highly innovative markets, basically only two participants benefit: the first to supply a market with new products and the best to operate in the respective market segment. The classic cash cow, i.e. a product with a thoroughly optimized production process, is becoming increasingly rare. In addition, it is increasingly important for companies today not to annoy customers and thus not to provoke a #WhateverGate. In addition, there is the opportunity to offer completely new products and services that customers do not yet even know they want or need.
The success for organizations here therefore lies primarily in the speed with which they can generate ideas, evaluate them, develop them further and bring them to market in short generational sequences – or discard them if they fail. The so-called “culture of failure” is often invoked here.
The new self-image of employees
As if all this were not challenge enough, today the “resource” of the employee no longer develops “in line with the company”. Today, employees can no longer be adapted to the processes of an organization to the usual extent without complaint. Rather, the trend is going in exactly the opposite direction. Self-determination and individuality are highly valued and vehemently defended commodities. Today, for example, an organization increasingly defines itself by who its employees are and how they want to and can contribute to the company’s culture. Against the backdrop of a shortage of skilled workers, good processes and good opportunities for advancement are fading, while work-life balance and the flexibility to respond to employees’ needs are gaining in importance.
The end of “it’s always been this way…”
To respond to all these changes, new frameworks need to be created. Because insisting on what has always been successful will become the basis for failure – now and in the future. The sooner this reaches the consciousness of those responsible, the sooner the necessary change can be initiated to successfully survive in a changed market environment.
We would be happy to tell you how the principles of agile development are applied in our company and how you can also benefit from them. Please contact us.
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