Agile is a Bad Strategy

5 Things Every Agile Practicioner Should Know About Strategy

Hanno Jarvet

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Strategy

Strategy is the framework which guides those choices that determine the nature and direction of an organization.

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Strategy  vs.  Opera.ons  

A   B  

C   D  

WHAT?  

HOW?    

+  

-­‐  

+  -­‐  

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Driving Force

The strategic area which exerts greatest influence. Exists by default if not deliberately chosen.

1.  Products and services offered 2.  Markets served 3.  Technology 4.  Method of sale 5.  Method of distribution 6.  Natural resources 7.  Production Capability 8.  Size / Growth 9.  Return / Profit

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Givens

•  Quality •  Customer service •  Low cost manufacturing •  Growth •  Profit

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Areas of Excellence 1.  Products Offered:

–  Product Development + Sales/Service 2.  Markets Served:

–  Market/User Research + Customer Loyalty 3.  Technology:

–  Technology Research + Application Marketing 4.  Production Capability

–  Manufacturing Efficiency + Substitute Marketing 5.  Method of sale

–  Sales recruitment + Sales Effectiveness 6.  Method of distribution

–  System Effectiveness + System Organisation 7.  Natural resources

–  Exploration + Conversion 8.  Size / Growth

–  Volume Maximization + Asset Management 9.  Return / Profit

–  Portfolio Management + Information Systems

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Critical Issues of Strategy Implementation

1.  Structure 2.  Systems / Processes 3.  Skills / Competencies 4.  Compensation

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Problems With Current Product Development Orthodoxy

1.  Failure to correctly quantify economics 2.  Blindness to queues 3.  Worship of efficiency 4.  Hostility to variability 5.  Worship of conformance 6.  Institutionalization of large batch sizes 7.  Managing timelines instead of queues 8.  Absence of WIP constraints 9.  Inflexibility 10. Noneconomic flow control 11. Centralized control

Source: D. Reinertsen

Scaled  Agile  Framework™  Big  Picture  

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Sequence of Strategy

1.  Driving Force 2.  Future Scope: product/service/market/geography 3.  Performance and Timing Required 4.  Key Capabilities Required * 5.  Size/Growth Guidelines * # 6.  Profit/Return Guidelines * # 7.  Business Unit Missions * # 8.  Departmental Missions * # 9.  Individual Accountabilities #

* Critical issues emerge # Evaluation required frequently

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Sample Strategic Business Concepts 1/3

We proactively seek out the building, repair, and remodeling needs of professional trades people and DIYers in the commercial and residential construction industry. We respond with cost effective, differentiated staple products that enhance the performance or ease the installation of key building materials and are category leaders. We concentrate in geographic markets with a significant and/or a growing construction industry and an adequate distribution infrastructure to reach a critical mass of end users. Our intent is to be the recognized leader in the products we offer.

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Sample Strategic Business Concepts 2/3

Our strategy is to fulfill the complete spectrum of health care needs of cancer patients and their families. We respond with treatment options that truly “make a difference”, delivered by the ablest professionals in a seamless and sensitive manner that empowers patients to make coherent decisions. We will concentrate on geographic markets in which we can develop competitive advantage with all constituencies involved in the continuum of cancer care. Our intent is to be the recognized leader in providing positive, measurable outcomes.

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Sample Strategic Business Concepts 3/3

We will proactively seek out the market of the professional information/education needs of the health science market. We will respond with added-value content that maximizes the development of valuable copyright materials through multiple formats, languages and/or distribution channels to capitalize on profitable customer segments in English-speaking countries.

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Recommended Reading •  The Principles of Product Development Flow: Second Generation

Lean Product Development. Reinertsen http://www.amazon.co.uk/The-Principles-Product-Development-Flow/dp/1935401009/ref=sr_1_1?ie=UTF8&qid=1414418416&sr=8-1&keywords=reinertsen+flow

•  Top Management Strategy. Tregoe, Zimmerman. http://www.amazon.co.uk/Top-Management-Strategy-B-B-Tregoe/dp/0906237165/ref=sr_1_2?ie=UTF8&qid=1414418571&sr=8-2&keywords=top+management+strategy

•  90 min video: Decentralizing Control: How Aligned Initiative Conquers Uncertainty – Reinertsen

http://vimeo.com/45947817

•  http://scaledagileframework.com/