Business Agility in the Age of AI

Often, I receive a question about how risk management is done in an Agile way. I believe that people expect some shiny Agile risk management framework or at least a checklist to be used. But luckily, Agile is all about the principles, and those principles already manage the risk.

So, let’s see the main principles that Agile organizations use to manage risk.

A “mother of all risks”

Doing something that does not have value is a huge risk. We can even be efficient in doing invaluable things, but that just makes it even more stupid.

One of the best ways to avoid such situations is to collaborate with your customers and stakeholders all the time. Things like on-site customers, Experience teams, Design sprints, Sprint reviews, guerrilla testing, and feedback loops in general can help a lot.

Experts as a rocket fuel

Telling skilled people how to do their jobs is one of the best ways to fail globally. Experts are called experts for the reason. By not using your expert’s knowledge, you are raising the chances of making wrong decisions, thus increasing the risk of failure.

I cannot resist saying that managers are usually not experts. Their primary job is to lead people by enabling them to make qualified decisions and remove impediments.

”Hey, experiment, my friend…”

Many people fail to use experiments in a proper way. It’s a shame because experiments are our friends.

Imagine that your marketing team is united in suggesting that your future campaigns should target parents. It is tempting to respond to this by adjusting ALL of your future campaigns to it, but it is a terrible decision. The reason is — we don’t know if it works or not. Here is where the experiment jumps in. Ask yourself: What is the minimum experiment that we can do to test the hypothesis? Notice that minimum implementation minimizes the effort, which minimizes the risk of high cost. It also minimizes the risk of screwing up the things that already work well.

So, your experiment succeeded? It sounds insane, but I saw a lot of cases where simply nothing happens after a successful experiment. Be sure to follow up on your successful experiments with a clear plan on how to spread it.

What if an experiment fails? Just be grateful that it was just a cheap experiment, not a big bang change. There is a saying that with a big bang, only a bang is guaranteed.

Experiments are one of the best risk management tools.

Delivering in short cycles

I believe that nowadays, most organizations understand the concept of delivering a small, valuable piece of their work frequently. However, I noticed that too often, people conclude that this principle is not applicable to their work. For example, when designing a new coffee machine, you cannot deliver until the machine is finished.

In such cases, only a tiny shift of mindset is needed. You don’t necessarily have to deliver something usable in short cycles but something “feedbackable”. To avoid the risk of taking the wrong way, always work in short cycles to receive feedback constantly.

Coming back to the previous example of the coffee machine, why not build a plastic model that does not produce coffee but can be used to test how customers operate with it and if customers like its design?

---

I can hear you saying:

“That’s all nice, but I need a comprehensive framework to predict all risks and mitigate them appropriately. Traditional risk management offers this…”

Well, my friend, I have bad news and good news for you:

The bad news is that predicting in uncertain environments (software development, people-related, complex products, etc.) is impossible. So, the risk-predicting framework that you’re looking for does not exist. You can’t predict all risks, and you have to live with it!

The good news is there is a workaround. When we cannot predict, why not organize ourselves to be able to change our direction rapidly and without too much pain whenever we realize that we failed? That is exactly what makes an organization agile. We have to be …

Flexible.

Business flexibility means being able to adapt to any new situations (including your failure) in a fast and cheap manner. Indeed, if our failures are cheap, then we can use a series of failures to find the right thing. In other words, we can use fast and cheap mini-failures to prevent the risk of failing globally 🙂

If it feels strange, you have to know that some very successful Agile movements, like Lean startup, use failure to learn and adapt rapidly. For example, Rovio, the maker of the mega-popular game Angry Birds, had 51 game failures before releasing the right one.

To make such things possible, ask yourself:

What can we do to enable rapid changes?
Which processes can we simplify or even remove?
What experiments can we take?

Business flexibility is the ultimate risk management tool.