Summary
Many project leaders believe that they must choose either Waterfall or Agile project management methodologies, but the reality is that a hybrid approach can be beneficial for complex projects with diverse stakeholder needs. Hybrid approaches have evolved organically in response to the demands of modern projects, rather than being tied to a particular time or event. By reviewing the key components of both Waterfall and Agile, project leaders can build a hybrid approach that meets their project’s unique requirements.
However, traditional thinking has led to a tribalism mentality within the project community, with people strongly favoring one methodology over another. This way of thinking limits the potential for real innovation and effective solutions, and organizations often choose to “go agile” without considering the fundamentals of traditional methodologies that may be needed for some projects. This rigid and divisive thinking leads to significant financial losses and wasted resources.
To combat these outcomes, organizations can benefit from implementing hybrid project management methodologies that blend the planning rigor of Waterfall with the flexibility of Agile. The Project Management Institute’s 2020 report indicates that nearly 11.4% of investment is wasted on poor project performance, and The Standish Group’s CHAOS report shows that only 31% of projects are successful, with an estimated annual global financial loss of $3 trillion. A blended approach can help organizations balance agility and structure to nimbly adapt to unforeseen challenges without losing sight of their objectives. The article then briefly reviews the core components of both Waterfall and Agile, emphasizing that they contain the building blocks of a hybrid methodology.
Waterfall: The Structured Approach
The traditional Waterfall methodology is structured and sequential, where progress “flows” downward through distinct phases: conception, analysis, design, planning, construction, testing, implementation, handover, and maintenance.
Key characteristics of the Waterfall method are highlighted through various examples
Sequential phases
London’s Crossrail project, a significant infrastructural undertaking budgeted at £14.8 billion, illustrates the effectiveness of the Waterfall model’s distinct and sequential phases. Each phase had to be meticulously completed before the subsequent one began, ensuring a structured progression that left no room for oversights. Despite the challenges involved, the Crossrail project, upon its completion, was hailed as an engineering marvel, connecting 41 stations over 118 km and forecasted to serve about 200 million people annually.
Detailed documentation
The LHC project was extremely complex, including a 17-mile-long circular tunnel and thousands of custom parts. The detailed documentation was crucial to ensure that everyone involved thoroughly understood each phase. Similarly, the $1.5 billion Burj Khalifa project in Dubai serves as an example of how the Waterfall model’s meticulous upfront planning can lead to predictability in cost and timeline. Despite the immense scale and complexity of the project, the world’s tallest building (828 meters) was constructed within six years, as per the original timeline.
However, numerous high-profile project failures have exposed the limitations of the Waterfall approach
Rigidity
The Myki ticketing system project in Melbourne, Australia, starkly underscores the Waterfall method’s rigidity. With a budget exceeding AUD 1.5 billion, the project took four times more than the expected two years. Yet, the system was riddled with issues due to its inability to adapt to evolving user requirements and technological advancements.
Late discovery of issues
The U.S. government’s HealthCare.gov project, which cost over $2 billion, illustrates the repercussions of late-stage testing, a characteristic of the Waterfall model. System defects identified during the late testing phase resulted in a flawed launch and considerable public and political uproar, leading to expensive and time-consuming repairs and improvements.
Incompatibility with change
The National Broadband Network (NBN) project in Australia, an AUD 51 billion endeavor, experienced frequent shifts in strategy and technology, resulting in delays and budget overruns. This highlighted the Waterfall method’s inadequacy in managing projects where requirements are dynamic and continually evolving.
Unsuitability for undefined projects
In 2015, Cerner, a health care technology company that provides electronic health records software, began a project to develop a new system for the U.S. Department of Veterans Affairs. The project, which was using the Waterfall model and was estimated to cost $16 billion and take 10 years to complete, quickly ran into problems. The VA’s requirements for the new EHR system were not well defined in advance, and the Waterfall model made it difficult for Cerner to change course. By 2018, the project’s cost had increased to over $20 billion and was still years behind schedule forcing the VA to terminate the project. The Cerner VA EHR project is considered to be one of the most expensive and disastrous IT projects in US government history.
The digital era, characterized by rapid changes and unpredictable environments, has tested the Waterfall method’s limits, recognizing a need for more adaptable project management methodologies.
Agile: The Adaptive Approach
Agile methods focus on enabling teams to deliver work in small increments, thus delivering value to their customers faster. Because the team continuously evaluates project requirements, plans, and results, it can make changes rapidly.
Key characteristics of Agile, exemplified in various projects, include
Iterative development
The development of Google’s search engine is a fitting example of iterative development. It started as a research project in 1996 and evolved into the most widely used search engine today, servicing over 8.5 billion daily searches. The continuous enhancements, adjustments, and improvements made over the years underline the concept of iterative development intrinsic to Agile.
Customer collaboration
Amazon, a pioneer in customer centricity, epitomizes the Agile principle of customer collaboration. Its constant solicitation and incorporation of customer feedback into its products and services have propelled it to its stratospheric market value.
Response to change
Spotify, the world-leader in streaming music, is a classic case of Agile’s adaptability. It has consistently evolved its business model and product offerings in response to market changes and user demands, moving from a simple music streaming platform to offering podcasts, videos, and personalized playlists.
However, the Agile methodology has its share of limitations
Inadequate documentation
The Agile method’s focus on rapid delivery often leads to insufficient documentation. In 2015, the German supermarket chain Lidl launched a project to implement a new SAP system. The project failed to accurately map out Lidl’s unique business processes onto the new system. The lack of sufficient documentation led to misunderstandings between the development team and the stakeholders, causing discrepancies in the system’s design and functionality and leading to the project’s cancellation in 2018, incurring a loss of around €500 million.
Unpredictable delivery time and costs
The UK’s Universal Credit welfare reform project, budgeted initially at £2.2 billion, illustrates Agile’s difficulty in estimating delivery times and costs. The project’s costs escalated to over £12 billion, and it’s still not fully implemented nearly a decade later due to its complex nature and continuous changes in requirements.
Dependence on client involvement
Projects where the client cannot commit significant time or does not provide timely feedback can face significant hurdles. A notable example is the $60 million U.S. Coast Guard payroll system project, which was terminated in 2017, partly due to insufficient stakeholder engagement.
Inadequacy for certain types of projects
Agile’s flexibility and adaptability do not translate well to projects with fixed requirements or requiring high predictability. For instance, the One World Trade Center construction, a project with a budget of approximately $3.9 billion, required strict regulatory compliance and precise planning, which wouldn’t have been feasible with Agile.
As Agile continues to evolve, these limitations underline the need for project management methodologies that can blend the strengths of both Waterfall and Agile, effectively mitigating the weaknesses inherent in each. Thus, the case for a hybrid approach becomes increasingly compelling.
Embracing the Hybrid Approach
A new phase in project management has unfolded with the introduction of hybrid methodologies that blend the benefits of both Agile and Waterfall approaches, while overcoming their shortcomings. The popularity of hybrid techniques is not linked to any specific time or occurrence, but rather has developed naturally as a solution to the requirements of contemporary, intricate projects.
Key characteristics of Hybrid Project Management and their real-world implications include
Flexibility and structure
Philips, for their digital transformation initiatives, utilized a hybrid methodology, which incorporates the adaptability of Agile and the organization of Waterfall. The company employed a hybrid method in the development of its HealthSuite digital platform, where they carried out quick and iterative software releases, while also strictly following documentation and safety protocols. The combination of these two methodologies allowed for a hybrid approach that was both flexible and structured, which in turn, led to improved product quality, quicker time to market, and more predictable costs, thereby resulting in cost savings.
Phased and iterative
Hybrid methods employ a phased approach for well-defined components and an iterative approach for uncertain ones. On its way to becoming the world’s best digital bank, DBS Bank executed well-planned phases for infrastructure overhaul while implementing iterative development for its customer-facing digital services. This approach enabled them to revamp their legacy systems and simultaneously bring innovative services to market, boosting their revenues from S$9.6 billion in 2014, the year it launched its digital transformation, to S$14.6 billion in 2020.
Customer involvement and predictability
Hybrid methodologies strike a balance between customer involvement and predictability. British Telecom (BT) uses agile methods for digital services, such as its new 5G network, to ensure customer involvement by getting feedback early and often. This helps to ensure that the final product meets the needs of customers.
For infrastructure projects, such as its new data centers, BT uses Waterfall methods to plan and execute projects more predictably. This helps to ensure that projects are completed on time and within budget. The hybrid approach ensures customer involvement and offers predictable delivery timelines, helping BT achieve an annual revenue of £21.37 billion in 2021.
Benefits of Hybrid Project Management and its related examples include
Balanced approach
Hybrid methodologies offer the best of both worlds, as shown by Ubisoft. The video game developer used Waterfall to plan and develop assets like characters and initial coding to ensure that the base game would be robust and well-constructed. They switched to Agile when it came to gameplay mechanics, debugging, and post-launch updates. By applying a hybrid approach, Ubisoft successfully launched Assassin’s Creed Valhalla to commercial acclaim in November 2020.
Risk mitigation
A hybrid approach allows for risk mitigation by blending Agile’s adaptability with Waterfall’s structured planning, as demonstrated by Tesla’s hybrid approach to the development of their Model 3. To build the Gigafactory, where the vehicle’s batteries are produced, Tesla utilized rigorous planning and risk assessment methods. At the same time, Tesla’s capability to update vehicle software over the air allows for rapid issue resolution and feature addition post-production. This dual strategy enables Tesla to mitigate risks effectively while maintaining flexibility in a high-stakes manufacturing landscape.
Efficient use of resources
Hybrid approaches offer the stability of resource-intensive, long-term planning while providing the flexibility to adapt rapidly to market demands. For example, Zara’s detailed planning and staggered development phases ensure that there is minimal resource idling. On the other hand, cross-functional teams consisting of designers, marketers, and store managers engage in iterative cycles and sprints. These quick feedback loops allow Zara to allocate or reallocate resources immediately based on real-time sales data and new fashion trends.
When Hybrid Methods Work Best
Recognizing when to use a hybrid method is pivotal to a project’s success. The approach offers adaptability without sacrificing the vision and detailed planning that many projects require, making it an invaluable approach that every organization should develop. So, how can you determine whether your project would benefit from a hybrid approach? Here are some indicators:
Diverse stakeholder needs
When you’re dealing with a broad range of stakeholders, each with their own requirements and expectations, a hybrid approach can cater to all. It can allow for iterative feedback, like in Agile, while maintaining a structured roadmap, as in Waterfall.
Varied project phases
A hybrid method can offer the best of both worlds if different stages of your project require different approaches — such as an initial research phase requiring strict structure, followed by a development phase needing more flexibility.
Uncertain requirements
For projects where requirements may change or need to be fully clear at the outset, but there’s a need for a definite structure or end goal, a hybrid approach can accommodate evolving needs without losing sight of the final objective.
Risk management
If your project encounters high levels of uncertainty or risk that require iterative testing and review but also require thorough documentation and planning, a hybrid method can strike the right balance between adaptability and meticulousness.
Complex project structures: For projects characterized by intricate interdependencies, multifaceted components, or multifunctional teams, a hybrid method can cater to the nuanced demands, balancing rigorous planning with nimble execution.
Final thoughts
It’s time to end the destructive battle between Waterfall and Agile. The key to unlocking the true potential of projects lies in bringing a diverse set of tools to every initiative — an assortment of approaches, methods, and techniques that can be adapted and applied per each project’s unique demands.
Hybrid project management methodologies present a promising step in this direction, embracing the strengths of both Waterfall and Agile while offsetting their weaknesses. By having hybrid methods as a tool in our toolbox, we equip ourselves to increase the success rate of projects, deliver more value for our organizations, and navigate the complexities of the project economy more effectively.
