Agile methods and frameworks gained popularity in all types of work, but far and away the majority of folks taking it on were initially software delivery teams. Searching for books on “Agile” now returns mostly software delivery team specific books. Later, agile in delivery teams only with a traditional organization around them became referred to as “Agile 1.0”.
In the early 2000’s, some companies wanted to obtain the benefits of agility elsewhere in their organization or throughout their entire value chain. This the first time I read the word “Agile 2.0”, in 2004. This was overloaded, but also indicated a company using the principles of agility across the organization.
In 2008 I came across “Agile 3.0” in print, by Blake Lindsay and then others. This was the result of studying teams that were achieving more than 10 times their initial velocities, or the amount of work they were able to deliver sustainably and with quality. These teams had excellent agile practices, and in addition they reported terms from team psychology: “work worth doing”, “transcendent purpose”, and “The science of highly motivated teams” as studied by Niki Harre. Agile 3.0 grew to mean agile teams which were not siloed, that is a team was self organizing to compose the skillset needed to deliver the top priority backlog items. For example, a single team could have someone from what used to be called the accounting group, a member of the board of directors, a manufacturing design engineer, and a machine operator. This team would then pull from the single backlog that represented what the organization must accomplish to achieve competitive delivery of customer visible value, this week.
Below I took a swing at explaining Agile 1.0, 2.0, and 3.0 as I’ve seen them at clients, with examples of organizations at that level as of this writing, and a rough formula that does let us predict how quickly that company can deliver customer visible value, from idea to the customer’s hands.
Agile 1.0, (Royal Bank of Canada, John Deere, Mitutoyo, Johnson Controls): a company adds Scrum teams to deliver specific components with double or better velocity.
The over-all value stream is modeled by Tome’s Law: “Commercialization Velocity = Team Velocity + Organizational Velocity.”
Agile 2.0, (JP Morgan Chase): a company relaunches as all Scrum teams to deliver their previous outputs with double or better velocity.
The over-all value stream is modeled by: “Commercialization Velocity = SUM[Team Velocity].
Agile 3.0, (Zappos, Valve, Spotify, Scrum Inc.): a company dissolves discipline-specific Scrum Teams and relaunches as cross functional Scrum teams, coordinating non-sequentially and non hierarchically using Scrum of Scrums, to deliver work worth doing- solutions that have customer visible value. Through mass-parallelization the hand-offs and sequential-flow-waterfall-stage-gate-wait-states no longer apply.
The over-all value stream is modeled by: “Commercialization Velocity = Team Velocity*Team Velocity*Team Velocity*….
It is worth noting, that we don’t achieve a fully object oriented system, the stated goal of Scrum by it’s co-creator Jeff Sutherland, until Agile 3.0 in this model. Interestingly, this level is also the most rapid velocity from new product or service idea to customer visible value.