The Agile Executive

Colleague Clarke Ching asked me about the language I use in interacting with executives on Agile topics. To quote Clarke:

Obviously the language one uses with a developer is quite different from the language one uses with a program manager. Likewise, the language you [Israel] use in discussing Agile with executives must be quite different. What language do you use? In particular, what language do you use amidst the current economic crisis?

What language do you use amidst the current economic crisis?

I view the economic crisis as part of life. Having grown up in Israel, I still clearly remember:

• The 1956, 1967 and 1973 wars;
• Various economic crises;
• Any number of measures taken by the government to cope with financial crises. For example, devaluing the currency on many occasions.

We all survived and the country moved forward in leaps and bounds. We simply learned to accept dramatic changes as inevitable, to continue doing what we believed in. We, of course, changed tactical plans in response to disruptions such as a change in the value of the currency, but continued to do the right things strategically. Such turbulence, and possibly worse, has been characteristic of much of the world for many years now. Just think of Eastern Europe, Latin America or Africa.

Fast forwarding to 2009: I try to put the economic crisis in perspective. I have discussed the techno-economic cycle along the lines articulated by author Carlota Perez in her book Technological Revolutions and Financial Capital: The Dynamics of Bubbles and olden Ages.  In my recent post Why Agile Matters,  I stated:

• The fifth techno-economic cycle started in 1971 with the introduction of the Microprocessor;
• This cycle has been characterized by software going hand-in-hand with miniaturized hardware. We are witnessing pervasive software on unprecedented scale;
• Furthermore, software is becoming a bigger piece in the contents of just about any product. For example, there are about 1 million lines of code in a vanilla cell phone;
• Agile software significantly reduces the cost of not “only” software, but the cost of any product containing software;
• And, Agile software enables us to respond faster and more flexibly to changes – in the software, in the business process that is codified by the software, in the product in which the software is embedded.

In short, I speak about software as an important factor in the bigger scheme of things – the techno-economic cycle.

What language do you use in your conversation with executives?

I describe the benefits of Agile in the business context. For example, when I meet an executive of a major financial institution, I discuss with him/her issues of compliance and risk his company is facing.  For a global financial institution I typically discuss the critical needs during transfer of trade from London to Wall Street. A lot of things need to work seamlessly in order to ensure smooth transition. If things do not work well within the short transition window, the implications are dire:

• Unacceptable risks. Billions of $$ could be lost if a global financial company cannot start trading on time in Wall Street;
• Severe compliance issues. The executive with whom I speak and his/her company could get in serious regulatory trouble due to a failure to reconcile trades and keep the required audit trail.

The ties of these business imperatives to Agile are straightforward:

• Higher quality code reduces the risk of a ‘glitch’ in the transition of trade from London to Wall Street;
• Should a financial institution suspect a glitch might happen, Agile usually enables Application Development and Operations to fix the code faster than traditional methods;
• And, using virtual appliance technology enables deploying the fix in minutes instead of months.

I usually cite the examples of Flickr and IMVU to demonstrate how fast one can deploy software nowadays. I make it crystal clear that I do not expect a global financial institution today to be able to deploy every thirty minutes or every nine minutes as Flickr and IMVU do. However, I stress that the software industry is clearly heading toward a much shorter cycle between concept or problem identification and deployment. I point out that he/she has an opportunity to be ahead of the power curve, to gain competitive advantage in the market through superior velocity in both development and deployment. Obviously, a faster introduction of a new hedging algorithm could make a big difference for a financial institution.

What do I typically hear from the executive in such a conversation?

The responses I usually get tend to reflect the alignment (or lack thereof) between the financial strategy and the operational strategy a company follows:

• The “cut costs by cutting costs” variety:  the discussion revolves around the need to continue to carry out layoffs on a quarterly basis. In this case I stress the life cycle costs of software, asking the executive I am speaking with to answer a tough question: Can you afford the software you are developing?  This question often leads the executive to reexamine the balance between the two strategies (financial versus operational).
• The “cut costs by systemically improving the underlying system” variety. The conversation with executives of this mindset usually converge quickly on what is most important to the business: time-to-market, quality or productivity. It is a small step from here to getting into the “hows” of Agile roll-out.