How Rapid Iteration & Customer Representation Help You Avoid Risk
Less obvious, yet tremendously important, is the fact that agility also drives risk avoidance. When a company decides to invest in anything, there's at least some element of risk. Products and projects carry a lot of uncertainties that contribute to those risks, such as:
- Errors in the business case
- Management and contingency reserves
- Cost of correcting and managing triggered risks
Agile tries to pull risk upstream and address it earlier by focusing your team’s efforts on the minimum viable iteration required to deliver customer satisfaction. With agility, you reduce your need for reserves and spend less money on risk management and recovery. Better risk control will also reduce exposure in areas as diverse as regulatory compliance, public perception, and the ability to hire and retain top talent.
Related: Building the Agile Workforce
At a macro level, agility’s short solution-development cycles act as early warning systems for a project that's misaligned with market or customer needs. This allows you to identify projects likely to fail and terminate them earlier in the development cycle. By doing so, you reduce project portfolio costs and lower the risk of developing a product that will fail in the marketplace.
Agility delivers risk reduction in a number of other ways as well. The ability to have customer representation in your product or service development eliminates much of the uncertainty associated with launching a solution. It also allows potential issues to be identified earlier in the development cycle, improving the visibility of risks. That makes corrective actions quicker and cheaper and reduces the impact of those issues.