Agile in a Regulated Environment


Companies in regulated industries see the same quantum-leap innovations as everyone else; agile, distributed computing, IoT, and blockchain to name a few.  Unfortunately, these are deemed a bad fit for a regulated company beholden to antiquated rules and validation requirements.   This is how highly regulated companies get left behind the innovation curve, never to cross the chasm. 

Don’t let the initial rejection from Compliance stop your organization from innovating.  Focus on the goals and principles of the innovation while customizing the “how” of implementation to your situation.  Let’s walk through how this can be done with Agile.   

The real Agile benefit

Agile is a mindset that should be adopted by every organization.  The goal or principle of Agile isn’t scrum, but just another way of building a rapid-learning loop.  What processes can you build to increase the speed of learning within the constraints of your environment in which you operate? Here are some key ways agile can speed the process of learning about your customer.

Daily standup – make sure the work done yesterday is correct and today’s work is on the right track.

Retrospective - team-led review of how to improve the velocity and accuracy of their work.

Customer involvement early and often - How can you get feedback on the design or outcome of your product/service before it goes out to the entire audience? What ways can you allow the development group to empathize with your customers to help build outstanding value?

Ship product early and often (with discrete value) - Get your changes out the door and in the hands of users.  Continually reassess how small of a change you can give that will provide value.  The smaller the change and the quicker its delivery to customers, the faster you'll get feedback if you're heading in the right direction.  Better to taste the sauce in the pot than when it's on the dish.

Team empowerment - the folks that do the work are in the best position to determine how that work should be done.  This frees up management and business owners to focus on customer involvement and removing impediments from the team’s success.

Objections such as "we can't ship every day" and "we need full validation on the full changes" are missing the point around rapid learning.  Your challenge is to keep finding ways to lower the risk of over-delivering on changes and under-delivering on value.  These ideas are ways to lower that risk, and there are methods available to you today to incorporate many of these ideas within your regulatory framework.

Real-World Examples

We've seen two week cycles of configuring the quality system for a new process and the validation tests built as a deliverable of the change.  The business owner can then review the work and the full validation suite can be run at once without the later overhead of building all the tests at once, divorced from the meaning of the change.

Rollouts of processes can be broken apart by global region, by business function, and by pilot group to give results to customers faster.  Many organizations ship changes on a quarterly basis to create predictable, short downtimes and find ways to create discrete value to their customers in that timeframe.  Feedback is then given on this work that can then be incorporated in the next quarterly release.  Without that feedback, another 3 months of work could have been wasted on wrong requirements.

The pitfall here is focusing on scrum or automation as though those are only for Silicon Valley.  Focus instead on how to speed your learning of your customers and market – you may find the agile framework is a great start to those answers. 

Ray Dalio, founder of the highly-regulated financial firm Bridgewater put it best: “Create a culture where it’s ok to make mistakes but unacceptable not to learn from them.”