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Agile is more expensive!

… and it is worth it. Let’s not sugarcoat the facts.

It costs more to:

  • Touch the same code twice.
  • Purchase a temporary injection mould using rapid tooling or prototyping.
  • Quickly build something useful and add structure or architecture later.

If we purely focus on these specific aspects, Agile might appear to be a costly endeavour. You could easily save money by optimising locally. But as a business, we’re not in the game of local optimisation; we’re striving for overall profitability. That requires a broader perspective. The small savings you make locally will often lead to larger costs elsewhere. In the end, net, you lose.

If we could predict the future

If we had a crystal ball to predict the future, Agile would indeed be a money drain. But let’s take a moment to reflect. How confident are you in your ability to:

  • Truly understand what your customer wants?
  • Forecast sales accurately?
  • Estimate costs reliably?
  • Predict the next industry trend?
  • Anticipate competitor moves?

The reality is that our predictions are far from perfect. And when you acknowledge that uncertainty, Agile starts to make sense.

Optimise the cost of the full journey

Imagine navigating through rough terrain – like the jungle – without a clear path ahead. Sure, it’s tempting to move straight through, hoping for the best. But Agile is like climbing to a nearby look-out spot first. Yes, it takes extra effort to get there, and it might feel like a detour. But from that vantage point, you can see potential hazards, spot better routes, and decide if the journey is worth continuing. The best route might not be a straight line.

If we re-evaluate our earlier examples, we notice there is no need to:

  • Touch the same code twice if the look-out reveals that the feature isn’t valuable to your customers.
  • Invest in a full production mould if the view shows weak sales projections.
  • Properly engineer a solution if a pivot has proven to be the smarter option.

Agile helps you navigate the entire journey with fewer dead ends and more informed decisions, optimising the total cost of reaching your destination—even if some parts feel more expensive upfront.

Some examples

Here is an anecdotal example from my time as a PhD student. Most PhD students would create their thesis in a phased way, starting with the literature study, next experiments, then analysis, and last conclusions. At some point, a PhD student—writing the conclusion—discovers an error. The only solution is to redo the experiment, which was executed some three years ago. Unfortunately, the experimental setup was broken and not sufficiently documented. Painful. Approaching a PhD in a more Agile end-to-end fashion would initially cost more effort because you would be dealing with the literature study—as an example—at several moments. In the end, it will pay back!

Take another example from my blog The Art of Decision Making: Buying a Handpan. If my decisions are accurate just 50% of the time, paying the extra cost upfront still pays off significantly in the long run. Agile works because it’s built on the understanding that uncertainty is a given, not an exception.

(If you doubt about the 50% ratio, reflect on how much external coaches and consultants have supported your organisation and how often these really made a big difference. Also here, an Agile approach is worth a lot. It also reminds me of the HR manager feeling unlucky with the 6th plant manager in 7 years 🤔. Or my great time at Pringles: did you know they launched and abandoned minis, dippers, rice & multigrain Pringles? The multigrain was soooo delicious!)

Embracing Agile

Despite its benefits, Agile faces resistance:

  • Agile coaches struggle to explain the inherent tension between local sub-optimisation and overall success, being focused too much on implementing proven practices.
  • Managers resist because their performance is often evaluated on local outcomes, not organisational impact.
  • Developers and team members get confused when messages from coaches clash with managerial expectations and their own mental model.

The solution? Agile coaches need to speak plainly about these trade-offs. Only when that clarity exists can the rest follow.

Is Lean More Expensive?

… yes, and it’s also worth it. Lean practices, like single-piece flow, are also expensive. Although the sweet point might be slightly larger than single-piece ‘batches’, I’ve yet to encounter teams or organisations that moved beyond the sweet spot. So, everything said here about Agile applies to Lean as well.

To conclude

Yes, you were right. Agile is more expensive. That is, in the short run. Not in the long run.

And now you understand why. With this knowledge, you can adjust your mental model and make better decisions.

Agile isn’t about being cheaper in one area; it’s about being smart in a world where uncertainty reigns, so to maximise the value for your customers and your business.

Creative problem solving

At Ithaki, we don’t implement frameworks such as Scrum or Lean. We solve specific problems (too long lead time, low engagement, poor quality, too high costs, etc) by leveraging principles and practices from various schools of thought (Lean, Agile, Six Sigma, Sociocracy, Strategy Deployment, …). Combining your knowledge of your industry and our knowledge of the limitations of specific practices, we co-create smarter ways of working. In doing so, you become more productive while fostering care for your employees and society. Ithaki is like ‘Google Maps’: assisting your oblique journey towards excellence.

If there is anything we can do to support you or your organisation, do not hesitate to reach out.

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