Chapter 1: Fundamentals

Agile and Traditional: Quantifying the Difference

So, the Agile approach sounds great on paper. Software development teams swear by it, and there is abundant evidence that it works in other industries, too. But just how effective, ultimately, is a typical Agile process? Can we quantify it? Many have tried, as it turns out.

Between 2010 and 2015, various organizations conducted studies exploring the final outcomes of software development projects following different established project management approaches. A recent survey, conducted by CollabNet for the 13th Annual State of Agile Report (2019), provides additional insights into the current use of Agile project management techniques worldwide. Based on responses from 1,500 participants across the globe, 97% of surveyed tech organizations currently follow Agile practices in some capacity. And the trend appears to be accelerating: 61% of respondents have been following Agile practices for over three years.

Source: CollabNet/VersionOne

What is driving this change? The State of Agile Report indicates that organizations adopt Agile practices in pursuit of a number of operational goals, including accelerated delivery, improved adaptability in dynamic operating environments, and increased company productivity overall.

Source: CollabNet/VersionOne

And it is working. Through the adoption of Agile techniques, teams improve their ability to manage change, effectively diagnose and overcome challenges, and more frequently assess a project’s state through regular inspection and close collaboration.

Source: CollabNet/VersionOne

If Agile is starting to seem a little too good to be true, it is worth reiterating that context is everything. Agile practices work well in information-driven industries, where creativity and collaborative thinking play central roles. Just as traditional PM strategies fall short in such circumstances, the Agile approach would not make much sense in working environments driven by static, well-established goals. These industries focus on tangible deliverables and generally strive to maximize reproducibility in established, highly linear workflows. Not only would Agile principles not realize any tangible gains in these contexts, but the approach would likely be counterproductive.

In the software development industry, however, Agile produces positive results across the board. The question we are interested in asking is: Would these positive results translate when applying Agile techniques to the M&A process? We will not know for sure until a detailed study appears, but the close similarities between conditions in both industries strongly suggest that what works in software likewise works in M&A. Some companies have already successfully transformed through Agile M&A, in a demonstration of its efficacy and incredible potential. That is to say, we are seeing evidence that it works, even in the absence of a formal study.

Both software development and M&A begin with strong pre-determined final goals, called True North: in software development, the goal is usually something like providing the customer with a robust, effective tool carefully tailored to their needs. In M&A, the end goal is more along the lines of effectively incorporating the target acquisition into the existing corporate structure while maximizing value.

True North. True North is the guiding principle that drives any project as a whole. It is the highest-level strategic understanding of why a project has been undertaken and what value it is expected to hold for the company. In projects of significant length and complexity (for instance, software design or M&A), challenges sometimes arise when low-level details and tactical considerations cause teams to undertake work or explore avenues that do not directly contribute to realizing the True North objective. Accordingly, it is important for team members even at lower functional levels to periodically widen their vision and consider their work in the context of larger strategic concerns.

The route to achieving these goals varies dramatically from project to project. Just as every software design presents a unique need, so too does every deal and integration project. Teams can rely on previous experience and knowledge, but no linear, itemized blueprint can accommodate the incredible breadth of needs and challenges that emerge during the course of a long and complex project.

The unique advantages of Agile — the way in which it encourages teams to respond quickly and creatively to emerging issues, its ability to foster cross-functional collaboration and visibility across workstreams, and its focus on constantly improving workflow and eliminating waste work — really shine in the types of informationally complex, organically evolving projects typical of both industries.