Predictability is a key factor for businesses striving to meet their goals consistently. It helps reduce uncertainty, allowing organizations to focus on achieving desired outcomes. However, achieving predictability is not easy. This blog post explores the challenges to predictability in business, the role of agile, and practical steps you can take to enhance predictability in your organization.
The Challenges to Predictability in Business
Achieving predictability involves navigating various challenges that can hinder progress. These challenges fall into two main categories: uncontrollable and controllable.
Uncontrollable Challenges:
Market Volatility: Changes in the market and the broader economic ecosystem are beyond a business’s control. Factors like shifts in consumer behavior, economic downturns, or global events can disrupt predictability.
External Factors: Natural disasters, regulatory changes, and global pandemics can significantly affect predictability.
Controllable Challenges:
Unclear Goals: When business objectives are not well-defined, it leads to uncertainty. Teams struggle to align their efforts, making it harder to achieve consistent outcomes.
Operational Inefficiencies: Inconsistent processes or undefined workflows cause delays and make it difficult to predict timelines.
Undefined Systems: Without a clear understanding of how tasks move through systems, businesses struggle to optimize processes and achieve consistent results.
The Role of Systems in Creating Predictability
To build predictability, it’s crucial to define and optimize the systems within your organization. When systems are well-documented and understood, you can:
Ensure consistency in how work is completed.
Identify bottlenecks and areas for improvement.
Create a culture of continuous optimization where processes are regularly reviewed and refined.
This clarity in processes and systems directly impacts the performance of your business, affecting revenue growth, profitability, and competitiveness.
How Agile Enables Predictability
Agile methodologies play a crucial role in enabling predictability within organizations. The shift from rigid rules to flexible principles allows teams to make decisions based on the current situation rather than following a strict set of rules.
Key principles of Agile that enhance predictability include:
Empowerment: Agile pushes decision-making to the people closest to the work, fostering a sense of ownership and accountability.
Adaptability: Instead of sticking rigidly to plans, Agile encourages adaptation based on feedback and changing conditions.
Focus on Principles: Agile emphasizes guiding principles that help teams make decisions aligned with the organization’s goals.
Common Myths about Agile and Predictability
A common misconception is that Agile means businesses cannot plan or predict the future. This couldn’t be further from the truth. In fact, Agile supports planning, but with a flexible and adaptive approach. Here’s a breakdown:
Agile is not anti-planning: It encourages planning in iterations, allowing teams to adapt based on real-time feedback.
Long-term vision: Even with short sprints, organizations like Microsoft plan 18 months ahead using a seasonal model. They balance this long-term vision with the agility to adapt as conditions change.
“Plans are irrelevant; planning is everything”: This famous quote captures the essence of Agile. The act of planning aligns everyone on the next steps and goals, even if the plan itself evolves over time.
Microsoft’s journey towards agility offers valuable insights into how organizations can balance long-term planning with Agile adaptability:
Season-Based Planning: Microsoft plans in 18-month cycles, using a high-level approach to ensure flexibility.
Usage-Based Sales Metrics: They shifted from measuring salespeople on the volume of Azure services sold to focusing on customer usage. This shift incentivizes sales teams to support customers in getting the most out of their purchases, fostering a collaborative relationship that benefits both Microsoft and its clients.
Aligning Business Goals for Predictability
To achieve predictability, aligning the entire organization around common goals is critical. This alignment ensures that everyone—from leadership to individual contributors—is working towards the same outcomes.
Key steps to achieve alignment:
Define Clear Goals: Ensure that the entire team understands the primary objectives and vision.
Communicate Effectively: Regularly update the team on changes, progress, and next steps.
Focus on One Goal at a Time: Avoid spreading efforts thin across multiple directions; prioritize the most impactful objectives.
Encourage Collaboration: Create an environment where teams work together towards shared goals, fostering a sense of unity.
NKD Agility: Your Partner for Predictability
At NKD Agility, we believe in tailored solutions that fit the unique needs of your business. We don’t impose cookie-cutter methodologies; instead, we collaborate with you to identify the best approach for your context.
Here’s what we bring to the table:
Visibility: We help you see what’s happening in your systems, enabling informed decision-making.
Data-Driven Insights: From team morale to profitability metrics, our data-driven approach helps pinpoint areas for improvement.
Custom Frameworks: Whether it’s Scrum, Kanban, or Lean, we help you choose and adapt frameworks that align with your business goals.
Remember, predictability isn’t something that can be given to you. It requires a commitment to continuous improvement and a willingness to adapt.
Why Custom Agile Solutions Matter
One size doesn’t fit all. Applying a standard method across all businesses can lead to loss of uniqueness—the very thing that made your business successful in the first place.
- Example: In industries like logistics, using the same practices as every competitor might work, but it won’t set you apart. To stay competitive, businesses need a unique approach that leverages their strengths.
Large companies like Microsoft, Spotify, and Google have all tailored Agile practices to suit their unique needs. They’ve created their own systems that align with their goals and market strategies.
The Journey to Agility and Predictability
Moving towards greater agility and predictability is a journey that impacts every part of your business. It’s about creating an environment where teams can:
Adapt quickly to market changes.
Collaborate effectively with stakeholders.
Measure success in a way that aligns with customer needs and business goals.
Real-world Example: Microsoft’s shift from focusing solely on sales to encouraging usage-based bonuses changed their entire business approach, resulting in better customer satisfaction and stronger market position.
The Power of Collaboration and Alignment
At the heart of agility is collaboration—not just within teams, but with customers as well. Agile organizations focus on building strong relationships, which leads to better outcomes for all parties involved.
Internal Collaboration: Teams working together towards a common goal.
Customer Alignment: Focusing on understanding customer needs and adapting offerings to meet those needs.
Continuous Feedback: Using feedback loops to improve products and services over time.
This mindset shift is what ultimately drives predictability, enabling businesses to respond swiftly to new opportunities while maintaining a steady course.
Final Thoughts: Embrace the Journey for Lasting Success
Embarking on the path towards predictability through Agile practices will transform your organization. While the journey may be challenging, the rewards are worth it:
Increased Predictability: Through systematic changes and data-driven insights.
Competitive Advantage: By aligning your processes with market needs.
Higher Resilience: Enabling your business to thrive in a rapidly changing environment.
🔍 Ready to increase predictability in your business? Reach out to NKD Agility to explore how we can support your journey. Let’s work together to create a custom solution that drives your success! 🌟
Businesses want predictability. Predictability enables them to focus on achieving the outcomes that they desire in a consistent way. It reduces uncertainty and helps them achieve their business goals. But predictability is hard to achieve. There are all sorts of things that get in the way of us having predictability as a business.
Now, the things that we can’t avoid that get in the way of predictability are things like market volatility, the changes in the market, and the unpredictable nature of the world and the ecosystem in which we’re in. These are things we cannot control, so we have to include that in our story. But there are a bunch of things where we get unpredictability that we can control, that we can do something about.
Having clear goals or unclear goals causes unpredictability. Operational inefficiencies create unpredictability. You don’t know how long things are going to take because everything takes a different amount of time to go through the system. Really having an undefined system—if you don’t have a description of how things go through each of your systems—you could have many systems in your organization. Then how do we know that each thing that goes through each system is going through it in a consistent way, which enables that predictability?
All of those unpredictabilities, those frictions to our ability to do stuff, and inconsistent frictions to our ability to do stuff will impact on the performance of our organization. It will impact on revenue growth, it will impact on profitability, and it will impact on our ability to be competitive in the market.
The role of agile in this story, the role of agile in enabling predictability, is in the application of the ideas. It’s a lot about changing from rules to principles. Instead of having a bunch of rules that people mindlessly follow, have a bunch of principles under which the folks that you have within your organization can make decisions. Define the systems that you have and how you want them to work—not just as leadership telling people how to do it, but the people that are doing the work defining the systems. That’s pushing responsibility down the organization to the people who are actually doing the work.
Agile, or the mindset of agility, the agile philosophy, is about enabling people in our organization to improve the predictability of our business outcomes by improving the predictability of the things that they do. I think one of the difficulties is that most organizations, most people in organizations, are not looking at predictability metrics. They’re not looking at the data that indicates instabilities in the system. Those are the things that you want to control, where you want to make changes.
This whole idea of increasing business predictability is not something that just randomly happens. It’s not something that just installing agility in your organization is going to result in an increased level of business predictability. It’s something that is systematic, that is deliberate, that requires effort and consistency of application over a longer period of time to start making the changes, moving the needles to increase the level of predictability within your business.
There’s a myth that I see all the time in organizations at every level: that because we’re doing agile, we can’t plan or predict what’s going to happen. We can’t do estimates, we’re not supposed to be looking forward too far into the future. All of that is kind of bunkum. The fundamental principle of agility is about minimizing the amount of work you do until it needs to be done.
We don’t want to do documentation that is going to change frequently unless we need that documentation in order to understand what we need to change. We’d be better building some product, right? Build some product, test it in the market, and get into those tight feedback loops. That’s one of the key things that I find that organizations really struggle with within the context of predictability: they don’t close the feedback loops.
So if you’re looking at what you’re doing within the context of agility, this myth that you can’t plan for the future is just that—a myth. The poster child for agility is Microsoft’s transition in the last 10 to 12 years. They do planning looking forward over 18 months. The granularity is really high level, but they do plan over 18 months. They do a season-based model and they plan for 18-month seasons. There’s nothing wrong with that; there’s nothing anti-agile about that.
But it’s the way that you do it. It’s how you implement it. Is that 18-month plan something that is enshrined in “this is what we’re going to do”? How changeable and malleable is that plan over time? How much effort do you spend on that plan versus doing the work that you need to do just now? Those are all things that belay this myth that you can’t plan or predict because you’re doing agile. You absolutely can; you just use different tools and techniques to achieve that.
There’s a really famous quote: “Plans are irrelevant; planning is everything.” That’s the key to success within the context of business predictability. If you want to increase the predictability of your business, you need to stop creating plans and start planning. What is it we’re going to do next? Where do we want to go? What do we want to achieve? If we’re answering those questions and then communicating it effectively within the business, we can enable a level of strategic alignment with everybody in our organization.
If you look up “team” in the dictionary, it says a group of people working together towards a common goal. How can we do that if we don’t have that common goal? A goal is a single thing; it’s not a whole bunch of things. So what is it that your business is trying to achieve that you want everybody and every product and every effort to align behind? For a particular product within the context of that business, what is the thing that you want everybody working together towards? The outcomes of that product should align behind the product’s goal, the vision, the strategy.
These are things that are commonly missing in organizations, and that creates a fragmentation of effort. The effort that people put in is in a direction of their choosing—each individual on the team’s effort of their choosing, each manager’s effort of their choosing, each leader’s effort of their choosing, each product owner’s effort of their choosing. How do we enable us to be all working together towards that common goal? That requires planning to gain predictability.
We’re not really talking about risk mitigation as a document; we’re talking about risk mitigation as a holistic strategy for our organization. We’re not talking about resource management at the individual level; we’re talking about where our investment opportunities are as a business that fit inside of our strategic goals and strategy.
This whole idea of planning to gain predictability is to enable your business to have a competitive advantage in the market against other businesses in the same market. Naked agility can help you increase your business predictability by enabling you to do that. We can’t come in and just provide you with increased business predictability. You need to do that; it’s your business, it’s your organization, it’s your department, it’s your team.
The only people that can help you increase that predictability are you. We can bring our knowledge and expertise of what has worked in other organizations. We can bring ways and tools for analysing the data—what’s the current state of your system—helping you define your system so that you can then see where the problems are that are reducing your predictability so that you can fix them.
One of the big things we bring is visibility, so that you can see what’s going on. If you can see what’s going on, you can make tweaks to the way you do things. You can help the people that you work with make tweaks to the way they do things to hopefully increase that level of predictability within your business.
Now, that can be data-driven. We can look at data for team morale and capability. We can look at data for knowledge and skills. We can look at profitability of the business and where we’re spending the money. These are all data-driven approaches. We can then help bring frameworks and methodologies—ideologies, philosophies—what are things that are holistic to all businesses that can enable you to look at things in a different way to be able to see what’s going on and make those changes.
Perhaps Scrum is a good idea. Perhaps Kanban is a good idea. Perhaps lean thinking is a good idea. Perhaps Lean UX is a good idea. There are all sorts of tools, frameworks, and ideas available that have been shown to work in many different sorts of businesses that we can try and analyse to see if it works for your business in your context.
What we’re offering is a completely custom solution for your business that doesn’t make you like somebody else’s business. One of the things that I commonly see as a negative consequence of going and working with a large consulting organization that brings a standard methodology and practice and then applies it to your business is that you become like every other business that they’ve applied it to.
One of the things that made your business successful was its unique ability to take advantage of a niche that you’ve built in a market. Your business grew to take advantage of a niche, and if somebody comes along and applies their business practices or their system on top of it, then you’re just like every other company that uses that same system.
A great example is road hauling. If you’re moving goods around, those businesses are fairly standard. But businesses that use the same tooling as every other business that does the same thing are just the same business with a different owner or a different manager. They’re not different; there’s no differentiation in the market. They’re just filling that market.
How do they open new markets? How do they ingeniously solve problems in interesting ways that help them adapt their business towards a new niche or new capability or open up new markets? They can’t because they’re working within a structured system that doesn’t allow them to explore other opportunities.
What we want to do as a business is come up with our own way of moving from whatever it is we’re doing now towards a greater degree of agility so that it’s our business processes, it’s our unique way of doing things to fill that unique niche. If you look at every single commercially successful organization that has adopted agile practices, especially agile practices at scale, you’ll see that every single one of them has created their own system that fits the way they want to do business and is shaped by the way they want to do business.
They’re not just installing somebody else’s system. That’s why Microsoft uses the season-based model, Spotify has their way of doing things, and Google has their way of doing things. Every single one of these organizations has a unique way that’s bespoke to them of solving this problem of how do we increase our business predictability and our ability to serve the markets within which we’re in.
It’s pretty hard to describe what it looks like, sounds like, or feels like once you’re on this journey and you’ve made some progress towards a greater degree of adaptability and a higher degree of predictability. It’s going to impact everything in your organization.
Microsoft is often asked, “What changed?” When you made these changes and adaptations to your business, what changed? The answer is usually everything. Everything changed. The way they do financing changed, the way they do business changed, the way they find new customers changed, the way they manage customers changed, the way they build the products has changed, the way they engage with the people who build the products, and the way they engage with the outside world has changed.
Every part of their business processes has changed in their entire organization. Now, that’s a little bit of an overestimation; not everything has changed. They still have their journey, and they’ve not addressed some things that they probably could address. But they’ve done a good job of tackling some of those big things.
A great example you can go look up is the change in the way they measure bonuses for salespeople. It used to be that they were measured based on the amount of Azure time that they sell because Azure is the big selling feature. How much do you sell? But now it’s on usage. If you measure how much time they sell, the salesperson gets the customer to clinch the deal. They’re a closer, and that’s who you want as a salesperson.
Then the customer has paid the money, and the salesperson gets their bonus. But the problem with that is what happens at the end of the year when the customer hasn’t used the thing they’ve paid for, and it expires? They bought a year’s worth of stuff, and they’ve used 10% of it. Now they’re annoyed and angry that 90% of their funds have been wasted.
If you switch that around to usage, the sales folks get their bonus based on usage. They then need different skills; they’re not a dual closer. This is an example of a little tweak in the way a business functions that has a massive impact. The perfect salesperson is no longer a closer; they’re an enabler. They enable your company to help this customer use the service more and more.
For example, perhaps the closer brings in an expert to bamboozle the customer with all the cool things that you can do, and they close the deal, and they’re done. But what the enabler does is bring in, perhaps out of their own budget, external consultants and helpers to help over a longer term enable that customer to use the services more.
Now we’re talking about what enables you to use your more agile transition. DevOps—all of these things mean that you need to consume things more quickly, and it benefits both parties. It benefits both Microsoft because they get to sell more Azure, and it benefits the customer because they’re able to adapt to their market needs more quickly and more effectively.
What does it look and feel like? It looks and feels like everybody working together towards a common goal. We’re not working against our customers; we’re working with our customers. We’re not working against each other; we’re working with each other. That is the superpower that brings this whole story together.
It changes the behaviours of people in your organization. It changes the organizational culture. It changes the experience that both employees and stakeholders have, and it changes the way that you measure success in your business. Everything will change if you embark on this journey.
At the end of that journey—it never ends, but once you’ve made some progress on that journey—you will have more predictability in your business and a higher ability to take advantage of market opportunities when they arise because you’re then able to deal with surprises. You’ve got that level of predictability.
