Agile Project Management & Traditional Project Management: Understanding the Difference

Throughout this book, “Agile” and “traditional” project management methodologies will be discussed at length. “Agile” and “traditional” do not refer to specific methods or programs, and there is no “approved” set of Agile or traditional techniques. There are no governing bodies administering or owning Agile or traditional as models or processes. In fact, the concept of “traditional” project management appeared only recently, with the emergence of alternative approaches like Agile.

So, the two terms do not refer to specific processes; rather, they describe broad conceptual approaches to managing complex projects. Strategies for identifying ideal operating conditions drive both methodologies. There are numerous PM methods — like Scrum, XP, SAFe, DAD, waterfall, etc. — in use across various industries. Some methods are based on a traditional approach, while others employ Agile thinking, but it is important to understand that no single approach encapsulates either methodology.

Agile can be understood as a set of values that emphasize flexibility, collaboration, adaptability to change, and continuous improvement with each iteration, but the way in which these values manifest and play out varies with each approach.

First, we will review “traditional” approaches to project management. Project management as a formal discipline first appeared in the 1950s. Developed to improve workflow and productivity in extractive industries, traditional PM techniques are most effective in the management of manufacturing, construction, and resource extraction — that is, industries which require sequential and repetitive steps to produce consistent results.

As the administrative duties of productive and extractive industries expanded in scope and complexity, and the tertiary business sector as a whole grew in size and economic importance, project managers began to apply the same techniques to purely informational corporate projects like M&A. For such projects, the traditional project management approach calls for a rigid hierarchical structure, top-down management, and a workflow relying on functional groups completing work in sequence. Under the traditional approach, project managers and executives align processes and dependencies at a higher strategic level and hand down work items to functional groups, which are largely isolated from each other.

Traditional project management is not especially effective as an approach to information-based industries like M&A. Some aspects of traditional project management — like having a concrete set of steps to follow, and managing cross-team interdependencies — are applicable to M&A, but many other elements, like hard timelines, are not. Traditional techniques are most successful when project goals are static, activities are completed in a well-established sequence, and operational conditions rarely change.

For industries like M&A and tech, which are fluid by nature, these rigid, linear techniques are insufficient. Despite this misalignment, traditional PM worked well enough in the M&A domain for many years, and so provided little incentive to radically rethink the approach. Now, however, as M&A and similar industries become increasingly dynamic and information-dense, it is time to reevaluate.

Much of the developed world has moved away from the productive and extractive industries for which traditional PM was designed, and is now embracing more fluid, unpredictable sectors like service, finance, and tech. Operational conditions are changing as well. For example, businesses processed and stored information on paper for many years, but more recently they have come to rely on electronic documents like spreadsheets.

As with paper documents, however, electronic documents present obvious version control issues. Like paper documents, when changes are made to electronic documents it isn't always clear which version becomes the "master copy." While it is possible to make copies of individual items, any authoritative changes must be made to an agreed upon “master copy,” to avoid creating multiple conflicting versions.

Dictionary: Version control. Version control is a workflow issue that arises when pre-cloud electronic documents, like Excel spreadsheets or Word files, pass between numerous people via email. As different individuals make changes to the document without communicating with each other, or accidentally open older versions of documents buried in email chains, divergent copies begin to circulate, resulting in miscommunication, confusion, and duplicate work. With critical documents or time-sensitive tasks, poor version control can have especially serious consequences.

Before the advent of cloud-based collaborative documents and chat tools, working in sequence presented the only viable solution to the problem of version control, with each individual or team performing their work before handing the task off downstream. Unfortunately, this workflow model tends to lead to bottlenecks and work delays, especially as tasks are passed between constituencies. In many cases, significant issues arise with batch work.

Dictionary: Batch work. Batch work — also known as “clumping” — is a workflow inefficiency which occurs when a team or individual completes their portion of a task and then hands it off to the next team or individual in the work sequence, only to see it languish in an inbox or “to do” list. For instance, employee A might complete a request tracker on an Excel sheet, and then email the sheet to employee B, the next pertinent individual in the work sequence. Employee B, however, is bogged down by other work, and does not address the document until the next day. Employee B then hands the spreadsheet off to employee C, and the same situation plays out again. The work is thus completed in small, productive “batches” or “clumps,” separated by long periods of unproductive wait time.

This shift in technology and workflow is only one example of a wide range of changes transforming the business landscape at a rapidly accelerating rate since the 1980s. Our world is more connected, markets are larger, and all aspects of business and life more broadly seem to happen at a faster pace. While presenting potential hazards, the progressive globalization of markets and competition also creates many opportunities. Our current environment favors innovative and adaptable companies. It is no wonder the old management strategies, developed for a completely different landscape, are falling short and slowing continued progress. Enter Agile.

Then & Now:
“Way back when (pick your date), senior executives in large companies had a simple goal for themselves and their organizations: stability. Shareholders wanted little more than predictable earnings growth. Because so many markets were either closed or undeveloped, leaders could deliver on those expectations through annual exercises that offered only modest modifications to the strategic plan. Prices stayed in check; people stayed in their jobs; life was good.
Market transparency, labor mobility, global capital flows, and instantaneous communications have blown that comfortable scenario to smithereens. In most industries — and in almost all companies, from giants on down — heightened global competition has concentrated management’s collective mind on something that, in the past, it happily avoided: change.”
— “10 Principles of Change Management,” strategy+business, John Jones, DeAnne Aguirre, and Matthew Calderone

At its core, Agile is a problem-solving mindset — a way of conceptualizing and responding to constantly changing environments — which values spontaneity, creativity, and swift reaction to novel situations over established procedure, itemization, and static workflow. Agile is adaptive instead of predictive, iterative instead of sequential, and flexible instead of rigid. Agile is a product of today’s corporate landscape — just as surely as traditional PM was a product of yesterday’s.

Expert Opinions, on Uncertainty in M&A:
“I think that traditional project management does work, but I think when you're dealing with the more dynamic nature of M&A, where there's a high degree of uncertainty… that's when it starts to break down. But I think Agile is very much a function of uncertainty and I think M&A can be quite uncertain.”
— Toby Tester, Senior Consultant at BTD

Agile thinking heavily emphasizes collaboration, cross-functional transparency, and frequent communication. Modern software platforms and tools empower these values. In fact, these tools make Agile project management possible. New technology enables teams to collaborate in real time, solving the problem of batch work and enabling precise version control. An Agile approach allows for many parallel synchronous workflows, which enables project teams to work in small increments, optimizing the completion of individual tasks while minimizing wait times between items.

Process Flow Efficiency Comparison - Traditional vs. Agile