Dispelling the Mystique of Agile for Practical Use

Agile is a term that has gained a lot of attention over the last few years – and rightfully so. Whether it is used in the context of agile software development, agile project management, agile marketing or agile you-name-it, its list of benefits continues to grow. However, at its heart, this methodology delivers value more quickly and in a way that is meaningful to members. But what is agile really?

Rather than get a history lesson on the origins of agile, it is more important to understand what agile is at its core. Agile is embracing the uncertainty of the future by concentrating on smaller units of work that deliver value early, in close cooperation with the member or internal customer. Rather than engaging in a long-term project, marketing campaign or process improvement, agile divides those long-term endeavors into smaller units of work that are usable. Those smaller, usable units are made available to members or internal customers to solicit feedback on whether they are useful enough to spend future resources on further work.

What does that look like in practice at a credit union? Take a long-term project to develop a new checking product – a lot goes into this, including product design, programming, marketing and staff training. All this work needs to be planned and coordinated perfectly for a delivery that most likely takes longer than expected, and offers fewer features than originally planned.

Using agile methodology, the delivery of this new checking product would be broken into phases. Each phase or iteration would ideally produce something that is usable by a member. These iterations are called sprints under the agile methodology. The sprint length varies, but two weeks is common duration. How is delivering a new checking product in a sprint possible? In this case, it will take several sprints to create a minimum viable product (MVP). An MVP is the smallest amount of effort to create a product that is valuable to a member or internal customer.

MVPs are a great way to test the market and see if there is enough member interest to continue development. The MVP represents hundreds of hours of the project team’s work, whereas under the old model, a fully-developed checking product would represent thousands of hours. It is a risk and reward proposition. Using a traditional project management technique, often called “waterfall,” the risk is frequently disproportionate to the reward. With agile methodology, the risk is proportional to the reward and for the rare breakout hit, the risk is staggeringly diminutive to the reward.

Why produce an MVP of a new checking product, when for more effort, a credit union could have a full-featured new checking product? This is where agile reveals its true nature and frugality of resources. Using waterfall, the full product would be taken to market after a lot of organizational resources have been spent. Only then will a credit union learn if the product is something members want. With agile, the first MVP could simply be a sheet describing the features of the new checking product. It just needs to start the feedback cycle.

Feedback from the MVP allows a credit union to steer development and permits A/B tests. Members can provide feedback on Checking A’s feature sheet in one branch, while Checking B is presented in another branch. The members will make it clear which feature offering they prefer, and those features are the ones that should be placed into further development. The feedback cycle drives future sprint planning and determines which features need to be prioritized ahead of others, while some are removed altogether.

The feedback cycle provides valuable data that a credit union does not have to invest thousands of hours in to discover, and only after the product is launched. Using feedback data, adjustments to the feature lineup can be made as the team starts to build a pilot. This allows a credit union to invest resources only as needed, staying very lean. Once built, the pilot can be showcased to a branch or small group of members to start the feedback cycle again before building the product for everyone.

n this non-traditional application of agile, the checking product went through three iterations before it was released to the whole membership. Each time, a list of features were assessed and only those that proved to be valuable progressed; those that did not were eliminated. Because of this iterative approach, the certainty that this new checking product is something members want is much higher. Agile methodology is fitting any time project teams are building into uncertainty, which is why it is favored already in software engineering and marketing.

Waterfall suffers from a phenomena called the planning fallacy. In short, plans will typically be set under optimistic conditions that rarely account for the true work or true duration, even when planners compensate for known issues. Agile combats the planning fallacy by using feedback to organize and release resources using lean principles. In theory, this maximizes the value return on resources while reducing the overall risk of wasted resources. Waterfall still has its place, for example in construction or infrastructure projects, where activities generally must occur in sequence and are well known.

In the hands of trained agile practitioners, credit unions can enjoy accelerated delivery of value to members or internal customers while being very thoughtful with resources. It is not a remedy for all project management and delivery woes. However, agile will make a substantial difference in project delivery, as it embraces the uncertainty of projects and trades a rigid project plan for more communication with the member or internal customer. Any credit union willing to make the investment in agile will likely see projects that are shorter in duration, have higher value on final delivery and present less frustration for all involved.

Ray K. Ragan is Assistant Vice President of Project Management at Vantage West CU. He can be reached at 520-617-4014 or raymond.ragan@vantagewest.org.