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Business agility is the new black – is the Gartner bimodal outdated?

Published in Agile

Written by

Maarit Laanti
Director, Training, SAFe Fellow

Maarit Laanti is the Head Coach of Nitor. She has done her dissertation on large scale agile transformation. Maarit, a SAFe Fellow, is one of the contributors of SAFe methodology and is the first certified SAFe program consultant trainer in Finland.

Article

March 22, 2021 · 6 min read time

Are you familiar with Gartner’s bimodal development model presented in 2014? The idea behind the model is that the agile transformation of a company can be executed in two modes so that one mode supports stability and the other supports agile development. This kind of thinking is starting to sound outdated because all-encompassing agile development is here to stay.

This is not a novel concept. The idea behind the Gartner model is ambidexterity, in which a company should explore new innovations but, on the other hand, also exploit these innovations as effectively as possible.

In this kind of thinking, building innovations take time, but they can often be exploited for years to come. However, this has changed: today’s innovations are copied easily, which results in a continuous need for exploration.

Traditionally, innovations have referred to completely new products or services. When services become continuous, innovating and exploration also becomes continuous. Maintaining a product and the related further development are often merged with building new functionalities. Both are investments, and the productivity of both can be assessed in the same manner: as the value created by the investment in relation to the development effort it requires.

Next, I will go through three key statements for the archiving of the bimodal model:

1. An agile model is more affordable than the traditional waterfall

Many justify the use of Gartner’s bimodal model by saying that agile management only applies to digital development, not in their traditional core operations. As a result, they argue that the traditional waterfall model is a more affordable way of developing products in the area of traditional business. 

The idea of the waterfall model’s affordability is erroneous and based on outdated concepts. Once the product’s pipeline is automated, the benefits brought about by the automation will be introduced to the more traditional core operations.

Fast-paced technological development has enabled fast releases based on DevOps in all industries. The 2018 DevOps report stated that the industry is irrelevant. There are fast operators in all industries and all fields – whether it is regulated or not.

Every release not only contains a technical risk but also a business risk. Fast releases are smaller and therefore contain less risk. In addition, the releases can be distributed and tested first with only a limited number of users. Facebook, for instance, did this when it tested the demand for HD quality video with a limited group of users first.

As Reinertsen put it: “Why manage product development with a model that will lead to the longest possible cycle time if the cost caused by the delay is the most significant financial factor affecting your company?” The waterfall model means a 100% batch size leading to maximal cycle time.

Many companies are struggling to find enough investment money to renew and digitise their product portfolios. This means that basic operations must be made more agile so that the investments freed up from there can be allocated to renewing the offering.

2. Agility leads to compliant code and higher quality

Sometimes, people explain the use of the waterfall model with compliance. This, too, is a conservative view. Agile development conducted properly will actually lead to better quality than traditional development. 

When test cases are thought of before the start of the development and each and every individual section leads to a tested result, the traditional phase of fixing errors at the end of the project just before the deadline can be avoided.

Compliance and safety can be built into a process that progresses piece by piece. The best idea is to manage statutory development risks first: the riskiest functionalities are executed first, which means that their functionality can be ensured as early on in the process as possible.

Making software is wildly profitable. In the service business, digitalisation refers to the opportunity to customise the offering customer-specifically, or to gain better profits and currency (meaning speed; something released a week ago is already old). In the hardware business, this refers to increasing the share of software so that the total price of the product can be lowered and the product development times shortened.

3. Innovation is a constant also in basic production

The idea of innovations belonging only to new products and not to core business operations is absolutely faulty. At worst, this kind of thinking can lead to a situation in which a company is not able to renew its basic products, which generates the most significant share of their income.

The challenge is how every value chain in the company can be made to create maximum profit by using the software so that the company remains at the forefront of digitalisation and can develop both its basic products and new innovations at the same time. This means using innovation to cut costs.

Steve Jobs’ idea was to find companies with sought-after products but outdated and expensive technology – just as Dell’s minicomputer strategy prevented them from investing in PCs at the time. Jobs’ lesson to the world was that you have to be able to cannibalise your own products, just as iPhone cannibalised iPod because your competitors will not respect the idea of the maximal utilisation of innovation without investing in it.

You have to disrupt your own main product sufficiently early on before your competitors do it.

Here, the Gartner bimodal model proves to be an issue if it’s used to justify the main product being in a slow waterfall without any innovations and innovation being directed somewhere other than to the main product (or investments in the main product are not sufficient).

Clinging on to the old models prevents the full utilisation of agility in the entire company. The new opportunities brought about by technology should be used everywhere in the product development process – to produce the same or better services at a lower price.

Netflix – taking the lead through innovations

The modern version of the exploitation phase should proceed as follows: build a machine in your successful business area that grants you maximal speed using platforms and DevOps – and continue to invest so that your competitiveness grows at the same pace with your market share. At the same time, it’s a good idea to explore new technologies and opportunities to disrupt your own business area.

A great example of agile development, continuous innovation, and disrupting your own business is Netflix. To finish with, I’ll add a list of how the main product and the entire business model changed, one piece at a time!

  • 1997 Netflix is established.

  • 1999 Transfer to an ordered-based pricing model.

  • 2000 “Queue” – Immediately after a show has ended, Netflix recommends something else to watch (... next episode in 10 seconds...).

  • 2006 Personal recommendations list (personified products).

  • 2007 Video streaming service. Netflix was the first to transfer to streamed content. At the beginning, the payment only covered one video for a limited amount of time, but as competition increased, Netflix opened all of its content available for viewing for a monthly charge.

  • 2011 Own content production, first ”Netflix Original”.

  • 2011 Global viewing and partnerships with several different partners.

  • 2013 ”Binge-watching”, making the entire season available at once enabled watching several episodes of a series consecutively.

  • 2015 The entire industry is changing; Netflix doesn’t have adverts, and this is transforming the viewer’s experience while adapting their expectations in a more ad-free direction.

  • 2016 Unlimited viewing. Content is restricted in many countries. Netflix took a stand against the restrictions by stating that virtual private networks (VPN) should not restrict content if Netflix has made it available.

Do not let any model restrict or hinder your capability to learn new things! 


 

Written by

Maarit Laanti
Director, Training, SAFe Fellow

Maarit Laanti is the Head Coach of Nitor. She has done her dissertation on large scale agile transformation. Maarit, a SAFe Fellow, is one of the contributors of SAFe methodology and is the first certified SAFe program consultant trainer in Finland.