Lean vs Agile
Agile can be referred to as an
“iterative delivery system that focuses on value delivered, people collaboration, and product quality.”
When organizations, customers, and employees require innovation and where products delivered are complex, Agile shines. Recorded benefits to Agile are scarce, mostly due to a lack of situational awareness at the strategy level, but data is starting to show the cost of change decreases, employee engagement increases, and higher customer value is obtained. This displays that Agile increases productivity as a holistic measure, but not always efficiency in a specific project or process.
Lean can be referred to as a system that
“maximizes customer value with the least amount of resources.”
When management requires a stable and efficient process, decreasing lead times for customers, and reducing waste for the organization. Lean can shine and it has greater data points that show its benefits, including reducing time to market, decreasing stock on hand, reducing complexity, and reducing the number of errors. Lean increases efficiency in a process, project, or product cycle.
Overlaps — Lean vs Agile:
Lean and Agile have a lot of overlaps, but there is also confusion around those overlaps. Mostly due to ‘Agile’ vs ‘Lean’ thinking. The delta between Agile and Lean is in its approach to problem-solving and the types of problems an organization has. Agile focuses on the culture, the people, and quickly adapting for greater productivity. Lean focus on the system, the value produced, and the efficiency.
Which one is best for your organization?
Begin with your vision then evaluate the current state of your value chain and cross-reference this with the product evolution. Simon Wardley calls this a Value Chain Map (aka Wardley Map) and his talks are well worth a listen.
Once you have your ‘Value Chain Map,’ identify all the areas that your organization delivers, overlay a tool such as the Cynefin model to see which system would work best.
If your products have not been commoditized and your industry is simple, your competitive advantage is in lowering costs and being operationally efficient.
The problems you look to solve are not going to be resolved by Lean or Agile methodologies. Unless you refer to six sigma as Lean. Think Nexcare, Kleenex, and Ford. If your products are in a growth or mature phase in their evolution and your industry is complicated, then your competitive advantage sits in value add product delivery. Continuously improving your products to fix your customers problems better than any other organizations. This is a perfect place for Lean and a successful transformation will reduce waste, obtain faster delivery, and differentiate you from your competitors.Think Nike, Intel, and Textron. If your products are green fields, complex and changing frequently, your competitive advantage lies in innovation, customer experience, and solutions for a specific customer. Agile transformation will increase innovation, increase customer satisfaction and reduce costs for adapting to market conditions. Think Amazon, IBM, and Apple. Trying to sell to everyone, leads an organization to serve no one. The organization’s strategy should result in alignment deliberately on one specific competitive advantage. Understanding your value map allows you to be deliberate in your choice for Agile or Lean transformations, leading to measurable return on investment of said transformation, however, it doesn’t stop you from deliberately opening up markets. Agile organizations can use Lean to drive continuous improvement in the system to eventually outsource to other organizations if that’s the vision of the organization.
Recap:
Agile delivery transformations benefit companies in complex environments to realize innovation and reduce the cost of change. Lean system transformation benefits companies in complicated environments to realize a lower cost of value delivered to customers and decreasing the risks for the organization. Choose one, both or neither depending on your visions, strategy and where your products align to the value map.
As companies continue to grow. There are times where one methodology framework does not work and your company will need to merge two methodologies into one. If nothing works, then it’s time to pivot and take a different approach with the methodologies that are in front of you and create a new one. It all comes down to being able to adapt, finding what works best for the culture of your company, and what delivers results with a high ROI. Spotify, the world’s largest subscription streaming music service is a great example where they moved from ‘Scrum’ to ‘Agile Principles,’ then to a ‘Self Service Model (Spotify Model).’ Spotify also realized that the majority of their workload was ‘reactive’ instead of ‘proactive’. They began to experiment with a simplified version of Kanban (3 columns) where they drew two vertical lines with one horizontal line through ⅓ from the top of the board and categorized each column with the following headers: To Do, Doing, and Done. In the Kanban below, the To Do segment has a couple of tasks (yellow sticky notes) yet to be started. The Doing segment has one task in progress. The Done column displays two tasks completed. This simple board helps declutter your head by visualizing the work that needs to be done. It is also a great way to receive instant gratification when physically moving a sticky note from the To Do segment to the Done segment. And, if you’re part of a team, then add some names to the sticky notes to make it into a fun competition. Lastly, it helps create a shared view of the work.
Let’s take a look at Spotify’s Evolving Engineering Culture
What are your thoughts on Lean vs Agile?
