Why Tech Firms Must Now be Agile in Business, Too

Agile | Business Management

Why Tech Firms Must Now be Agile in Business, Too

Agile | Business Management

The future isn’t going to be like the past. In fact it isn’t even going to be like the present, but that’s not new for tech firms. What is new is that there are so many moving parts and large, disparate and sudden uncertainties out there that make forecasting deeply suspect.

The range of significant external factors – externalities in the jargon – is very wide and stretches out to the horizon and beyond. The pandemic has undermined the viability of many business models and working from home has given skilled people greater power to decide where, when and how they work, and who for. War has disrupted energy and triggered inflation and interest rate policy shifts that have ended the long era of cheap money, without giving any certainty as to what will follow. For tech firms, these things hit confidence in the three most sensitive areas: cash, people and customers.

These are just the shocks we know about – there are plenty more out there that we may have to respond to as we build our businesses.  We can all see the opportunities to reach for but who knows what twists and turns might be necessary or worthwhile on the way to get there?

Ironically, many tech firms are more agile in their technology than in business. It’s over twenty years since the software community started to get serious about agility, yet tech businesses and their investors often still organise themselves around pre-defined plans with a fixed attitude to their business model. Business plans were always a bit of an art form, but this outlook of uncertainty throws doubt on the effort of writing them and the value of reading them.  It’s time for business to learn from technologists.

The principles that drove the development of Agile software processes twenty years ago have a lot to teach business management today: Responding to change over following a pre-set plan; People and interactions over processes and tools; Action and delivery over exhaustive planning and  documentation; Collaboration on solutions over negotiating positions.

In management terms, this is all about the appetite and ability to be flexible in changing circumstances, with a very short feedback loop and adaptation cycle. How will your team respond when change happens and all of a sudden everything is different?

Management innovation seems to be most lacking in business models and structures. It’s almost as though these are sacrosanct, yet approaches are fixed and overheads are so often the drag anchor on the firm.

The most dynamic startups we’re working with now, have a fixation with the objectives and strategy, and a completely open mind about methods and tactics: Fix on the goals, decide strategy, give your team guidelines, and then get out of their way.

  • Concentrate the core team on what really builds value – avoid replicating what others already do
  • Contract in the rest as services – flex up, flex down, add, remove
  • Partner, collaborate, combine, integrate – Virtualise the business as well as the technology

Delivering the Sprints

In this world of uncertainty you and your team have to be very clear about the immediate objectives that get you to the next milestone, and to where that milestone fits into your overall game plan. Review frequently, make changes willingly and swiftly.

Each milestone leads to the next sprint forward, and you take stock each time and adjust. Keep a weather eye on the world around you, check where your goal lies, and adjust, adjust, adjust.

Hope and Cope?

This is not a winning management strategy, especially in times like these, and neither is relying on a traditional business plan. Most of those run three to five years and look what’s happened since mid-2019. The world is unrecognisable.

Structure your business for flexibility and be ready to pivot and adapt: shed lower value effort and contract in non-core capabilities so you maximise the value of your team, your time, and treasure.

Peter Osborn, founder and chairman, Flexiion

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