Agile Management in a Waterfall World

An entrepreneur comes to a venture capital firm with the design for a game-changing electric vehicle. The VC wants to know: if we give you capital, how many of these great new cars will you produce in 3 years? The entrepreneur does not yet have a factory or workers or suppliers. He does not yet have regulatory approvals or distribution networks. What he has is an innovative design and the belief that, given the chance to launch his EV business, he will be able to build and ship, solving challenges as they arise.

This example presents the fundamental tension between sources and uses of capital. Investors and clients want clear timelines and deliverables. The more complex and resource-intensive the projects, the more capital at risk, the greater the requirements for waterfall planning. When an investor or client puts up capital, they expect to know how it will be used and when they can expect a result. It is only rational.

On the other side of the spectrum, the entrepreneurs and vendors realize that the more complex and resource-intensive the projects, the more agility is required for a successful outcome. Designs, suppliers, customer sentiment, underlying technologies, and regulatory requirements are all subject to change. To get to the right result, it is important to iterate and adjust.