Lean vs Agile: When to use in 3 Minutes Hi, Im Mike from Surge.Coach, we partner
with leaders to maximise your organisations potential.
Agile can be referred to as an iterative delivery system that focuses on value delivered, people
collaboration and product quality. When organisations customers and employees require innovation
and where products delivered are complex! agile can shine. 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. Thus agile increases productivity as a holistic measure and but not always efficiency
in a specific project or process.
Lean can be referred to as a system that maximises 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 organisation. Lean can shine. Lean has greater data points to
show its benefits, including reducing time to market, decreasing stock on hand, reducing
complexity and reducing the number of errors. Thus lean increases efficiency in a process,
project or product cycle.
So what is the delta? Lean and Agile have a lot of overlaps but there is also confusion
around those overlaps. Mostly due to agile vs lean thinking, lean startup, agile and
lean mindset and six sigma.
The delta between Agile and Lean is in its approach to problem-solving and the types
of problems an organisation has. Agile focus on the culture, the people and quickly adapting
for greater productivity and lean focus on the system, the value produced and the efficiency
of the system.
So which one is best for your organisation, if any? Start 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 Map and his talks are well worth a listen.
Once you have your Value map, identify all the areas that your organisation delivers,
overlay a tool such as the Cynefin model to see which system would work best.
If your products have been commoditised and your industry is simple, your competitive
advantage is in lowering costs and being operationally efficiency. The problems you look to solve
are not going to be resolved by lean or agile. Unless you refer to six sigma as lean and
then please go ahead. Think Affco 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 organisations.
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 and Trade Me
If your products are green fields, complex and changing frequently, your competitive
advantage lays in innovation, customer experience and bespoke solutions. Agile transformations
will increase innovation, increase customer satisfaction and reduce costs for adapting
to market conditions. Think Amazon and Xero
Trying to sell to everyone, leads an organisation to serve no one. The organisations 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 doesnt stop you from deliberately opening up markets. Agile organisations can
use lean to drive continuous improvements in the system to eventually outsource to other
organisations if thats the vision of the organisation.
To recap
Agile delivery transformations benefit companies in complex environments to realise innovation
and reducing the cost of change. Lean system transformations benefit companies
in complicated environments to realise a lower cost of value delivered to customers and decreasing
the risks for the organisation
Choose one, both or neither dependant on your vision, strategy and where your products align
to on a value map.
And you just learnt how to decide between Agile and Lean in three minutes.
