I recently had a chat with a coworker about the rather inconsequential improvements in companies that had adopted Agile. While instances of significant improvements in team performance are numerous, cases where an organization as a whole has made noteworthy gains (2x-5x) are rare. I don’t know of many companies that have adopted agile on a large scale, made significant gains, and have been able to successfully sustain it for longer than 2-3 years. It is not often that the executives/senior managers feel very strongly about the gains that have been made at an organizational level.

Irrespective of how organization level performance improvements are measured (increase in business value delivered, reduction in cycle time, decrease in defects, increase in throughput), they are usually of the order of 10-20%. What are missing are the corporate level gains of 100%, 200%, 500%. Notice, that I did not mention cost reduction as a goal. Cost reduction is limited to 100% and rarely does much for increasing the throughput of the organization.

Value Stream Mapping helps us identify all the activities occurring in the value stream. These activities can then be classified into actions that create value and Type 1 and Type 2 Muda.

Type 1 Muda refers to activities that do not create value but that are currently necessary for the company; these activities cannot be eliminated right away.

Type 2 Muda refers to activities that do not create value from a client’s perspective and that are not necessary.
Based on my experience, Muda accounts for at least 50% of the work occurring in any non-agile project.

Theoretically, just streamlining the existing processes and eliminating inefficiencies in development, delivery, and production support should give us a gain of 100%. Other strategies that can increase the gains further are:

• Eliminating investments in features that customers do not find valuable
• Adding more value to a product so customers will pay more for it
• Eliminating multi-tasking to reduce cycle time and improve ROI.
• Protecting and elevating the system constraint and subordinating all else à la Theory of Constraints.

Couldn’t these easily provide the 2x-5x improvement in throughput? If so, then why aren’t we seeing companies realize this on a consistent basis?

Based on my experience, there is a significant difference in performance improvement levels between teams and corporate divisions. While significantly increasing team performance is relatively easy getting and sustaining similar gains at the divisional level is far harder. My hypothesis is that these gains often do not materialize due to a lack of personal agility, where personal agility is simply the “awareness” of things of value and adapting behaviors and mindset to use it.

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