How Can Large Companies Apply Agile Principles For Innovation?

6 October 2017

Agile and Lean principles have been around for a while. Once radical concepts, they have become mundane through repetition in startup communities around the world.

Trial and error perfected these theories that started out in academic circles. Without them, the software industry and startup boom may not have accelerated as quickly over the last twenty years. Instead of prolonged and expensive phases of research and development (R&D), entrepreneurs are encouraged to test theories with potential customers, learn from those experiences and make improvements.

Lean and Agile are interconnected theories; although, Lean can be applied to a wide variety of operational functions, including sales, marketing and customer service. Agile, on the other hand, is specific to software development. It has a manifesto.

Smaller companies and startups can apply these principles in practice fairly quickly. Larger companies, on the other hand, seem to struggle. In this article, we ask why and seek to understand how big companies can gain the same advantages as startups, except with the scale and resources to give them significant advantages.

Why large companies struggle with Agile?

1. Weak vision and strategy

In startups, innovation and fast progress isn’t a luxury. It is a necessity. You innovate, iterate, ship, gain feedback and keep going.

In larger companies, a new idea or process takes time to take hold in the organisation. There are legacy processes and systems in place. Cultural mindsets that don’t easily change. Innovation that can potentially disrupt core revenue streams, products, services or processes don’t readily gain acceptance, even when it could get a company closer to a larger strategic goal.

Without a clear vision and senior support, applying Agile principles may not go very far. It is perhaps one of the reasons global brands have been keen to support startup accelerators, invest in and buy startups, wrapping them into innovation-focused divisions. That is one way to absorb Agile, Lean and other practical principles that create outsized value for smaller organisations; but it’s not the only way.

2. Poor collaboration opportunities

Going back to startups, even those with remote teams, collaboration comes naturally. In the early days, you don’t have that many people to interact with, so even if they are remote, you can work together fairly easily, solve problems, take new approaches swiftly and maintain an Agile approach when developing new software.

Whereas those in larger organisations have dozens, if not hundreds of colleagues spread across teams, departments and different offices. Working together in an Agile group, especially a fragmented one is more challenging.

In many respects, it depends on how high priority this new approach is considered. That all comes down to high-level support and the resources, they give an Agile experiment. When something is important, then it should receive visibility, time and resources to make collaboration easier for everyone involved.

3. Reliance on legacy models

One of the main barriers to Agile adoption, especially if there isn’t enough high-level support, is an over-reliance on legacy processes. According to a ninth State of Agile survey by VersionOne, “42 percent of participants noted that their company culture was at odds with core agile values, and 37 percent felt pressure to follow traditional waterfall processes.”

Agile demands faster release cycles and continuous development, which means resources need to be deployed to make it work. An organisation also needs to shift its mindset to be happy to develop and release software quicker than it normally would using waterfall and other legacy processes, which can be hard to do without the right supporters and stakeholder advocates.

In response to the survey, Agile Alliance said that “Understanding that agile impacts organizational values and facilitating that transformation is the first step to having a broader adoption of agile, and more success with agile as a means to successful delivery.”

Key Takeaways: How can large companies apply Agile

  • Start with a small team. Test and witness what’s involved, how to succeed and fail when Agile principle are applied.
  • Understand that cultural shifts and changes are needed. Unless you are a highly innovative organisation, known for radical new thinking, then you may need to accept that large companies can’t adopt startup ideas without some cultural paradigm shifts.
  • Ensure Agile can spread to larger teams, other departments and countries with high-level support and resources. Without both, Agile experiments will stay small scale, as will the results.
  • Once Agile adoption is taking hold, remove the reliance on legacy principles and development models. Make room so that innovation can thrive.