The Rapid Growth of Agile

In 2009, Satoshi Ishi, Toyota’s manager of embedded software, explained that a defect found in production costs about 50 times more than if found in prototyping. And if found after production, Ishi continued, that defect could cost up to 10,000 times more.

A year later, Ishi would be proven right — and painfully so — when post-production defects in the Prius’ software cost the company more than $2 billion in recalls.

So how could a modern, successful, and innovative company like Toyota fail so colossally? And why couldn’t they catch such an obvious mistake earlier?

In a word: Waterfall.

Since the advent of mass-production, nearly every company, across all industries, relied on the Waterfall methodology to deliver their products to market.

In this style of project management, you start with meticulously documented requirements and then move sequentially through each discrete phase until the project is complete. Everything is built to the original spec, and there’s no going back — at least not without incurring massive costs. And the product is usually not exposed to customer feedback until it’s complete.

But as Ishi learned at Toyota, Waterfall wasn’t allowing businesses to catch problems early enough, before they became prohibitively costly. As a result, a new process called “Agile” emerged, replacing Waterfall’s rigid, linear process with a customer-centric focus on flexibility and iteration.

The Agile method centers around four core values:

• Individuals and interactions over processes and tools
• Working software over comprehensive documentation
• Customer collaboration over contract negotiation
• Responding to change over following a plan
  

“Instead of coming up with a plan and then vanishing behind your office walls to execute it, an agile model forces a team to stay connected to your customer and respond to their changing needs, keeping organizations nimble.” – Demian Entrekin, CTO of Bluescape

But what does Agile — a method of developing software — have to do with a real-world construction business?  

Well, Agile didn’t just change the game for software development — it went way beyond. Companies ranging from John Deere to National Public Radio saw massive improvements when they applied Agile thinking. In a recent study that spanned 14 industries, Agile-practicing organizations saw:

• 59% increase in turnaround time
• 6x improved efficiency in completing large, complex projects
• 87% improvement in their teams’ quality of work life
• 77% improvement in their ability to “deliver value to the customer”
  

Staying connected to the customer? Responding to the market’s changing needs? Increasing efficiency while decreasing costs? These aren’t just relevant themes in a construction business — they’re requirements.

By adopting the principles of Agile, construction teams are able to drive value and improve client satisfaction through better communication. And the best part -  you don’t have to upend your entire business to do it. You can start with implementing just the basics - at any time during a project - to start reaping the benefits.

Ready to get started?

In the remaining posts in this series, we will outline a set of agile principles here and here and how they can be applied to residential construction businesses.