From go to grow: using ‘agile’ management to grow your business

From go to grow: using ‘agile’ management to grow your business

Published 17 March 2014 14:49, Updated 17 March 2014 16:56

Andy Sheats

Health.com.au co-founder Andy Sheats says his organisation uses Agile to drive its whole business, even areas that have nothing to do with technology.

Agile is a management approach that uses short, iterative cycles and direct customer feedback to incrementally develop and improve your product or business.

It grew out of the lean manufacturing movement, but has changed over time to suit different needs and environments. Whereas traditional planning cycles are “plan, plan, plan, plan more, DO, then explain the variances”; Agile is more like ”think, do the first part, learn from it, do more…”. The focus is on getting market feedback from real customers as early as possible to make the best decisions along the way.

While most companies use Agile in IT and software projects, health.com.au uses it to drive our whole business…even areas that have nothing to do with tech. Benefits include improved communication, planning, accountability and adaptiveness. It is great for social and cultural change as it forces collaboration, even to the edge of team members’ comfort zones.

I first observed Agile in use at realestate.com.au. Tech staff who were barely on speaking terms morphed into a real team who worked productively at an intimate level. When we started health.com.au, I knew it would be a great way to build a team that would together grow our business.

STARTING WITH AGILE

As a start-up, we were able to instill an Agile mindset from the beginning. Our CFO, Brian Maher, didn’t really like it at the beginning because it didn’t look like a traditional plan. But Agile is not about doing things without a plan; it’s about forming a team structure and dynamic that can work iteratively toward an agreed objective.

Agile helps a business start small, but equally helps a large business think small. The key is to pick the smallest, most critical kernel of your idea and build from there, also known as the ‘minimum viable product’ (MVP)—the least you can do for which you get paid. The essence of Agile is to get this MVP to market, learn from customers and then quickly iterate the product to make it better. Then do it again. And again. Facebook didn’t start as the complicated thing it is today. It started as “hot or not” for Harvard co-eds.

Because Agile requires team members to explain, listen, understand, act, learn, adapt and be accountable to each other, it was a great way to meld team members who’d come from diverse backgrounds, especially in our formative stage. Instead of writing a massive untested plan up front, we concentrated on making the initial decisions, learning from these and building iteratively from there.

INCREMENTAL IMPROVEMENTS

Recognise that a long-term plan in a changing environment is sketchy at best. You still need a strategy and a vision, but break your delivery into pieces, called iterations, of a perhaps a week each. Concentrate on the current iteration, and perhaps the one after that. The more you learn along the way, the less concrete your distant iterations become – a scary thought for the planners.

At the conclusion of each iteration the team comes together to perform a ‘retro’ (‘retrospective review’, in old-speak a ‘post-mortem’). The purpose of health.com.au retros is four-fold:

1.Celebrate what we did (beer in hand)

2.Identify what worked well, and figure out how to do them again.

3.Identify what didn’t work well, and figure out how not do them again.

4.Articulate what we need to change in the next iteration, or in our work processes.

I recently had lunch with a customer who worked extensively in the Toyota Manufacturing System, which is like Mecca or Rome to Agile practitioners. He said these last three items represent the know-how of the business, the core asset in an intellectual property-based business like ours.

AGILE IN PRACTICE

Our first point of business was to use Agile to create the massive application document needed to apply for registration as a health insurer. Because there was no prescriptive format, we needed to identify the required contents, important supporting materials, and the form it would take.

Our first iteration was simply a table of contents—get this wrong and we would take the wrong direction. We shared that with the regulator and our other stakeholders to make sure we were on the right track. The second iteration incorporated their feedback. We assembled a binder with tabs for each item in the table of contents and put the best material we had at hand into each section. Every week we’d send the binder to our “customer” (in this instance, the regulator) to show our changes reflected their comments from the previous week. By iteration 10 we were ready to submit. Thanks to Agile’s focus on incorporating customer feedback, we knew it would hit the mark.

Our sceptical CFO now says of the process: “This makes me more productive. I don’t think we could have done it the old way.” The result is continuous improvement so we can continue to serve our customers in the best way possible. “Plan, do, learn, do…” and do it again.

Andy Sheats is cofounder and CEO of disruptive health insurance start-up, health.com.au.