The Secret History of Agile Innovation


You hear a lot about “agile innovation” these days. Teams using agile methods get things done faster than teams using traditional processes. They keep customers happier. They enjoy their work more. Agile has indisputably transformed software development, and many experts believe it is now poised to expand far beyond IT.

Ironically, that’s where it began — outside of IT.

Some trace agile methodologies all the way back to Francis Bacon’s articulation of the scientific method in 1620. A more reasonable starting point might be the 1930s, when the physicist and statistician Walter Shewhart of Bell Labs began applying Plan-Do-Study-Act (PDSA) cycles to the improvement of products and processes. Shewhart taught this iterative and incremental-development methodology to his mentee, W. Edwards Deming, who used it extensively in Japan in the years following World War II.  Toyota hired Deming to train hundreds of the company’s managers, eventually capitalizing on his expertise to develop the famous Toyota Production System — the primary source of today’s “lean” thinking. Iterative and incremental development methods were also a major contributor to the successful creation of the X-15 hypersonic jet in the 1950s.

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In 1986, one of us (Takeuchi) and coauthor Ikujiro Nonaka published an article in Harvard Business Review called “The New New Product Development Game.” Studying manufacturers that were releasing successful innovations far faster than competitors, the authors identified a team-oriented approach that changed the design and development process for products such as copiers at Fuji-Xerox, automobile engines at Honda, and cameras at Canon. Rather than following conventional “relay race” methods of product development — in which one group of functional specialists hands off its completed phase to the next functional stage — these companies were using what Takeuchi and Nonaka called a “rugby” approach, “where a team tries to go the whole distance as a unit, passing the ball back and forth.”

In 1993, another of us (Sutherland) faced what seemed like an impossible task: Easel Corporation, a software company, needed to develop a new product to replace its legacy offerings in less than six months. Sutherland already had a strong background in methodologies such as rapid application development, object-oriented design, PDSA cycles, and skunkworks. He hoped to create a skunkworks-like culture in the middle of corporate headquarters, blending the benefits of both organizational separation and integration. So he began by learning everything he could about maximizing organizational productivity. Reading hundreds of papers and interviewing leading product-management experts, he found himself intrigued by several provocative ideas.

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One came from a Bell Labs article on the Borland Quattro Pro team, suggesting that short daily team meetings increased group productivity dramatically. But the capstone concept for Sutherland was the discovery of Takeuchi’s and Nonaka’s rugby approach, even though it focused on manufacturing rather than software. Borrowing many of the HBR article’s key ideas and filling in specific operational practices, Sutherland created a new way of developing software; honoring the rugby imagery, he dubbed his approach “scrum.” Scrum methods enabled him to finish his seemingly impossible project on time, under budget, and with fewer bugs than any previous release. He then collaborated with longtime colleague Ken Schwaber to codify the approach, and in 1995 the pair presented scrum to the public for the first time.

Of course, Sutherland and Schwaber weren’t alone in their search for innovative methods. The Information Age was exploding.

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