Agile – Empower Business By Treating The Human Condition

We like to think of ourselves as rational beings. The truth is – as humans, we are more irrational than we like to admit. Even when provided knowledge, studies, and evidence, it is in our nature to act in shortsighted and inconsistent ways. Neither of these traits are conducive to running “good business.” In a technology-driven and globalized world, the need to address this issue is becoming ever more critical.
While curing the human condition is likely an impossible challenge, a leadership framework that treats its symptoms exists- agile. Initially created to handle the fast pace of technology changes for software development projects, it finds itself relevant across industries – as technology becomes a more significant part of every business. The framework harnesses change for a competitive advantage, and its manifesto is simple:

  1.  Individuals and interactions over processes and tools
  2. Working software over comprehensive documentation
  3. Customer collaboration over contract negotiation
  4. Responding to change over following a plan

The keyword in all of this, of course, is the most repeated one: “over.” Before project managers accustomed to traditional management claim anarchy, we need to stress that processes, tools, documentation, contracts, and planning are essential… we are merely acknowledging that they are enablers; and NOT the end goal.

As I visit a couple of irrational tendencies, it is worth noting that many different methodologies fall under Agile (Scrum, Lean, Kanban, SAFe, etc.), and the ideas presented represent a form of Agile syncretism more than any one methodology.

Irrationalities examined:

Have you ever watched a bad movie until its end? Slogged through a terrible book? We come up with plenty of excuses for this behavior – I already paid for it, or I already put time into it – are common justifications for continuing our suffering under our own free will. The truth is that money and time are gone (sunk costs) regardless of whether we finish the work or not, yet for some reason, we stick with it.

Other studies, including those by Nobel Prize-winning economist Richard Thaler, points to another irrational behavior that might be at play. An “endowment effect.” We value what we have more than what we could have regardless of the actual value. It is the cost associated with attachment. It’s like holding an underperforming stock (when it’s clear you made the wrong choice) instead of re-investing it into a better performing one. To some extent, this plays into the idea of cognitive dissonance – we struggle to accept when we are wrong, our reality cannot handle it. What’s worse is that the longer that we are wrong, the harder it is to change course.

How can leaders and teams get past this? The answer is “by responding to change” – when it presents better opportunities, rather than just sticking to the plan. There are plenty of great quotes around planning, but two speak particularly well to the agile mantra:

“Planning is everything, plans mean nothing” – Former President Eisenhower

“Everyone has a plan until they get punched in the mouth” – pugilist philosopher Mike Tyson

In agile, the exercise of planning is essential, but it done with the recognition that the plans themselves are not the end goal. If there is a change in your external environment that strips your planned output of value, should you march on for the sake of the plan? No, I beg you to pivot! We will all know more tomorrow than we did today. Therefore, our methods should act accordingly (be flexible and loose). Agile prescribes that plans should not be overly detailed or granular – because they will change. In this sense, agile helps treat the symptoms of the endowment effect. If we don’t over-invest in planning, it is less difficult to move away from them when a better path emerges.

Regarding cognitive dissonance – it also gives us an easy out. The framing does not suggest management was proven wrong – instead, new information led to new possibilities.

This brings us to another scenario: what happens when your plans go awry, and there isn’t anywhere to pivot? This is a complicated situation that does not have a standard response. In some cases, you may still be able to salvage some value by sticking with the plan – but in others, it may be best to abandon ship altogether. Agile’s approach to communication – both through team member interaction and customer collaboration leads to what is called a “fail fast” approach. No one wants to fail, but if failure can’t be avoided, you certainly want to do it early before high costs are incurred, and opportunities are long gone. It is in this way that agile lessens the burdens of sunk costs on human decision-making. It is much easier for management to make the right call and kill a project before a significant investment has been made.

Final Thoughts

Agile is not a silver bullet, nor is it easy to implement, but it can provide benefits to companies outside of the software world. By reducing human attachment to plans and past work performed, companies can utilize available resources more effectively.

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