When it comes to team and company performance, many old-school thinkers and business-people look to how they can cut costs. Not their fault, but to some this is the only way they can leverage their stagnant knowledge, instead of taking on an agile approach and promote increased learning. This is likely where some are labeled as “the banker” or “the accountant.” There is recent evidence that shows if we perform on both sides of the finance and marketing fence, there is a higher level of progress and efficiency overall on spending, innovation, and revenue.
Conflicting Views: Cost Cutting vs. Value Creating
There are two strategic views that play within this spectrum; either cutting costs or creating value. Cutting costs creates the concept that there is a finite source of value or income that must be compensated for. Creating value on the other hand, breaks the barrier of thinking there is a cap on source of wealth and ideas. Certainly anything to be created requires that costs be incurred, but that is not to say we must limit investment if all the signs say GO!
Cause and Effect of the Value Cycle Explained
This brings us to the traditional vs agile project standard. When you look at a traditional project, the premise is set at the beginning of the project that it will have a finite timeline and budget. In an agile project you typically don’t have these restraints because the primary concern is about product and how to build value into it. All else if done properly will generate an infinite level of return. Why? Because a product being developed in an agile environment has the implicit expectation that with time there will be more to learn about the market, product composition, and technology that will allow for improvement. Reduced cost is a byproduct of the value cycle, since there’s usually a way to produce something with higher durability making it less prone to defects and complaints. This in turn satisfies the market and creates more demand and increased prices. Volume will also increase, and as we know that also drives down the maintenance or per unit costs.
Value Cycles Are Not Meant to be Broken
The value cycle never ends, hence why typically we look at an agile project as infinite as well. Actually the term “project” can be seen as a sort of oxymoron statement when putting words “agile” and “project” together. But that is for you and your peers to debate. When we look at the constituents of the value cycle right from the beginning where we determine requirements all the way to market release, maintenance and feedback, we can see very clearly that the market isn’t picky about how a product with unique features will look like at first sight. If someone claimed that a time-machine would take up the space of a city block, many would not be concerned. They would still look to use the product and would probably line up along a few city blocks to be the first to use it. This example may be a little far-fetched, but it is used to drive the previous point into context.
Why re-iterate?
As you can see value cycles and agile are very closely tied. They are based on an iterative process. If you believe you understand a concept upon the first try, there is a very high likelihood you missed a few points. If you take the first attempt, you may be successful, or you may not. However you took the first step, and there should be no reason to stop there. There can always be better, there is never any reason to stop improving.
[Image courtesy of Idea go at FreeDigitalPhotos.net]
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