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The Secret History of Agile Innovation

Darrell K. RigbyJeff SutherlandHirotaka Takeuchi

April 20, 2016

You hear a lot about agile innovation these days. Teams using agile methods

get things done faster than teams using traditional processes. They keep

customers happier. They enjoy their work more. Agile has indisputably

transformed software development, and many experts believe it is now poised to

expand far beyond IT.

Ironically, that s where it began outside of IT.

Some trace agile methodologies all the way back to Francis Bacon s articulation

of the scientific method in 1620. A more reasonable starting point might be the

1930s, when the physicist and statistician Walter Shewhart of Bell Labs began

applying Plan-Do-Study-Act (PDSA) cycles to the improvement of products and

processes. Shewhart taught this iterative and incremental-development

methodology to his mentee, W. Edwards Deming, who used it extensively in Japan

in the years following World War II. Toyota hired Deming to train hundreds of

the company s managers, eventually capitalizing on his expertise to develop the

famous Toyota Production System the primary source of today s lean

thinking. Iterative and incremental development methods were also a major

contributor to the successful creation of the X-15 hypersonic jet in the 1950s.

In 1986, one of us (Takeuchi) and coauthor Ikujiro Nonaka published an article

in Harvard Business Review called The New New Product Development Game.

Studying manufacturers that were releasing successful innovations far faster

than competitors, the authors identified a team-oriented approach that changed

the design and development process for products such as copiers at Fuji-Xerox,

automobile engines at Honda, and cameras at Canon. Rather than following

conventional relay race methods of product development in which one group

of functional specialists hands off its completed phase to the next functional

stage these companies were using what Takeuchi and Nonaka called a rugby

approach, where a team tries to go the whole distance as a unit, passing the

ball back and forth.

In 1993, another of us (Sutherland) faced what seemed like an impossible task:

Easel Corporation, a software company, needed to develop a new product to

replace its legacy offerings in less than six months. Sutherland already had a

strong background in methodologies such as rapid application development,

object-oriented design, PDSA cycles, and skunkworks. He hoped to create a

skunkworks-like culture in the middle of corporate headquarters, blending the

benefits of both organizational separation and integration. So he began by

learning everything he could about maximizing organizational productivity.

Reading hundreds of papers and interviewing leading product-management experts,

he found himself intrigued by several provocative ideas.

One came from a Bell Labs article on the Borland Quattro Pro team, suggesting

that short daily team meetings increased group productivity dramatically. But

the capstone concept for Sutherland was the discovery of Takeuchi s and Nonaka

s rugby approach, even though it focused on manufacturing rather than software.

Borrowing many of the HBR article s key ideas and filling in specific

operational practices, Sutherland created a new way of developing software;

honoring the rugby imagery, he dubbed his approach scrum. Scrum methods

enabled him to finish his seemingly impossible project on time, under budget,

and with fewer bugs than any previous release. He then collaborated with

longtime colleague Ken Schwaber to codify the approach, and in 1995 the pair

presented scrum to the public for the first time.

Of course, Sutherland and Schwaber weren t alone in their search for innovative

methods. The Information Age was exploding. Disruptive technologies were

terrorizing slow-footed competitors. Start-ups and incumbents alike sought

better ways to adapt to the unfamiliar and turbulent environment. Software was

becoming an integral part of nearly every business function, and many creative

software developers were working hard on better methods of programming to

increase adaptability.

In 2001, 17 developers who called themselves organizational anarchists met in

Snowbird, Utah, to share their ideas. Sutherland and other proponents of scrum

were among them. But the group included advocates of several competitive

approaches, including extreme programming (XP); crystal; adaptive software

development (ASD); feature-driven development (FDD); and the

dynamic-systems-development method (DSDM). All these approaches were often

known as lightweight frameworks because they used fewer, simpler rules to

allow faster adaptation to rapidly changing environments. Not many of the

attendees found the lightweight terminology flattering.

Although they disagreed on much, the group eventually settled on a new name for

the movement: agile. The word was suggested by one attendee who had been

reading the book Agile Competitors and Virtual Organizations: Strategies for

Enriching the Customer. The book gave 100 examples of companies including

ABB, Federal Express, Boeing, Bose, and Harley-Davidson that were creating

new ways of adapting to more turbulent markets. Name in hand, attendees then

forged consensus on a call to arms dubbed the Manifesto for Agile Software

Development, which spelled out four key values that everyone agreed on. Later

in the meeting, and continuing over the next few months, they developed 12

operating principles, called Principles Behind the Agile Manifesto. From 2001

on, all development frameworks that aligned with these values and principles

would be known as agile techniques.

Once the Snowbird meeting had canonized a creed for agile innovation, the agile

movement spread rapidly. The signatories posted their document online and

invited others to add their names as supporters. Most members of the original

group, joined by a number of new adherents, reconvened later in the year to

discuss ways to disseminate agile principles. All agreed to write and speak on

the topic. Several attendees wanted to form a more permanent working group; so

they established a nonprofit organization called the Agile Alliance to support

the movement. Today, the Agile Alliance has nearly 30,000 members and

subscribers.

Meanwhile, agile methodologies continued to evolve. In the late 1980s and early

1990s, researchers from MIT had begun to study Japanese manufacturing systems,

especially the Toyota production system. They coined the term lean to

describe the system s methods of improving productivity by eliminating waste (

muda ) through reductions in uneven work flows ( mura ) and destructive

overburdening ( muri ). Although lean methodologies were not presented as agile

frameworks in Snowbird, formal lean and kanban software-development systems

emerged during the 2000s. At first, some agile purists refused to recognize

these approaches as agile methodologies. But lean advocates intensified their

focus on customer collaboration, and eventually more agile practitioners came

to accept lean, kanban, and their hybrids (such as scrumban and lean scrum) as

legitimate applications of agile values and principles.

Success has many fathers, and agile innovation has a colorful heritage. While

agile s complex family tree sometimes provokes passionate debates among agile

practitioners, two things are clear: first, agile s roots extend far beyond

information technology and, second, agile s branches will continue to spread to

improve innovation processes in nearly every function of every industry.

Darrell K. Rigby is a partner in the Boston office of Bain & Company. He heads

the firm s global innovation and retail practices. He is the author of Winning

in Turbulence.

Jeff Sutherland is a cocreator of the scrum form of agile innovation and the

CEO of Scrum Inc., a consulting and training firm.

Hirotaka Takeuchi is a professor in the strategy unit of Harvard Business

School.