What is agile in business? Principles and how to start

Published Monday 30 March 2026

Table of contents

• What is agile in business?
• Traditional vs agile project management methodologies
• The 12 agile principles in business
• The benefits of agile for your business
• When agile works (and when it doesn't)
• Which business types can benefit from agile methodologies?
• How agile transforms your organisation
• The different types of agile frameworks
• How to implement agile methodologies in your business
• How to measure your success with agile KPIs
• Can software help manage agile teams?
• Manage your agile business with Xero
• FAQs on agile in business

Key takeaways

• Implement agile by starting with team education and choosing the right framework for your business needs, whether that's Scrum for structured sprints, Kanban for visual workflow management, or Extreme Programming for rapid customer feedback cycles.
• Organise cross-functional teams of 8-12 people with clearly defined roles and responsibilities, then plan work in short iterations with regular reviews to gather feedback and make continuous improvements.
• Apply agile principles by prioritising working products over lengthy documentation, embracing change at any project stage, and delivering value to customers early through frequent releases rather than waiting for one big launch.
• Measure agile success using key performance indicators like sprint burndown charts, cycle time tracking, team satisfaction surveys, and customer feedback on delivered work to understand what's working and identify areas for improvement.

What is agile in business?

Agile in business is a way of working that delivers results in small, continuous cycles rather than one big launch. It prioritises flexibility, collaboration, and responding to change over rigid plans.

Agile values four core ideas:

• Individuals and interactions: people matter more than processes
• Working products: tangible results over lengthy documentation
• Customer collaboration: ongoing feedback over fixed contracts
• Responding to change: adapting quickly over following a set plan

Traditional project management follows a linear path with strict planning and predictable phases, a methodology that was the standard for traditional waterfall implementation for more than 20 years. Agile takes a cyclical approach, with teams continuously planning, building, testing, and improving.

Traditional vs agile project management methodologies

Traditional project management follows a linear, step-by-step process, while agile takes a cyclical, adaptive approach. Here's how they compare.

Traditional (waterfall) approach uses these characteristics:

• Structure: linear phases from research to launch
• Planning: strict upfront plans with defined targets
• Changes: difficult to accommodate once work begins
• Delivery: one major release at the end

Agile approach uses these characteristics:

• Structure: cyclical sprints with continuous iteration
• Planning: flexible plans that evolve with feedback
• Changes: welcomed at any stage
• Delivery: frequent releases throughout the project

The 12 agile principles in business

The 12 agile principles, also called the agile manifesto, guide how agile teams work. They focus on delivering value, embracing change, and improving continuously.

Early and continuous delivery

Deliver value to customers early, then keep improving based on their feedback. Use customer input to refine your product or service over time.

Responding to changing requirements

Embrace change at any stage of a project. Adapting to shifting customer needs and market conditions helps your business innovate and stay competitive.

Frequent delivery

Release updates regularly rather than waiting for one big launch. Frequent delivery helps you:

• improve quality through ongoing refinement
• reduce risk by catching issues early
• gather feedback before problems grow
• stay competitive with continuous improvements

Close collaboration

Connect regularly across your business through daily standups or team check-ins. Frequent collaboration keeps everyone aligned, surfaces issues early, and speeds up decision-making.

Motivated team members

Give your team the support and trust to make decisions. Motivated teams find creative solutions, produce higher-quality work, and move faster. Build a supportive environment where people feel empowered to innovate.

Face-to-face communication

Direct communication reduces misunderstandings and speeds up problem-solving. Whether in person or via video, cross-functional teams that connect regularly share expertise faster and stay unified.

Working product is the primary measure of progress

Measure progress by what you've delivered, not by how much you've planned. Regularly review your products or services to confirm they meet customer needs and business goals.

Sustainable development

Build a workflow your team can maintain long-term. A steady, sustainable pace prevents burnout and supports consistent, high-quality output over time.

Technical excellence and good design

Invest in quality from the start. Strong foundations make it easier to adapt to new requirements, scale your solutions, and keep customers satisfied.

Embracing simplicity

Cut unnecessary work and keep things simple. Focus your team's time and energy on tasks that add real value for customers and your business.

Self-organising teams

Empower your teams to make decisions and own their work. When people apply their expertise and creativity freely, they deliver better results and use resources more effectively.

Regular reflection and improvement

Set aside time to review what's working and what isn't. Regular reflection helps your team boost efficiency, fix problems early, and continuously improve your product or service.

The benefits of agile for your business

Agile helps your business stay competitive and deliver better results. Here are the key benefits:

• Faster adaptation: respond to market changes and customer needs quickly
• Quicker value delivery: release updates frequently to keep customers satisfied
• Higher quality: catch and fix issues through continuous iteration
• Stronger collaboration: improve team communication and stakeholder alignment
• Better risk management: reduce project risk by delivering in smaller increments

When agile works (and when it doesn't)

Agile works best when your business needs flexibility and fast feedback. It's not the right fit for every situation.

Agile is ideal in these situations:

• requirements may change as you learn more
• customer feedback shapes the final product
• you need to deliver results quickly and iterate
• your team can collaborate closely and regularly

Agile may not suit projects with these characteristics:

• have fixed, unchanging requirements from the start
• require strict regulatory compliance with no room for iteration
• involve teams that can't meet or communicate frequently
• depend on a single, final deliverable with no phased releases

Here are some common misconceptions about agile:

• "Agile means no planning": Agile still requires planning, just in shorter cycles
• "Agile is only for tech": Any industry with complex, evolving projects can use agile
• "Agile removes accountability": Clear roles and regular reviews keep teams accountable

Which business types can benefit from agile methodologies?

Many businesses can benefit from agile methodology. It works well for projects that:

• require ongoing deliverables: work is released in phases rather than all at once
• have uncertain requirements: scope may shift as you learn more
• involve close customer engagement: regular feedback shapes the outcome

Agile is popular in software development, where the primary focus for the last decade has been on custom application development. It also works in engineering, construction, advertising, finance, healthcare, pharmaceuticals, aerospace, and government.

Agile principles help teams manage rapid change, deliver work incrementally, and stay productive under pressure. Learn more about what agile means.

How agile transforms your organisation

Adopting agile changes more than your project management. It shifts how your entire business operates, from team structure to decision-making.

Cultural shifts include the following changes:

• Embrace experimentation: teams try new approaches and learn from results
• Accept failure as learning: mistakes become opportunities to improve
• Value transparency: progress and challenges are visible to everyone

Team structure changes include the following:

• Cross-functional teams: people with different skills work together on shared goals
• Flatter hierarchies: decisions happen closer to the work
• Shared ownership: teams take responsibility for outcomes, not just tasks

Decision-making processes change in these ways:

• Faster decisions: shorter feedback loops mean quicker responses
• Data-driven choices: regular reviews surface what's working
• Customer input: feedback shapes priorities continuously

Customer relationship changes include the following:

• Ongoing collaboration: customers stay involved throughout the project
• Frequent updates: regular releases keep customers informed
• Responsive service: you adapt to changing needs faster

The different types of agile frameworks

Agile frameworks are structured methods for putting agile principles into practice. Each framework offers a different approach to planning, managing, and delivering work. Here are three common options.

Scrum

Scrum is a framework that organises work into short cycles called sprints, typically lasting two to four weeks. It is by far the most popular agile framework, with research showing that 81% of organisations report using Scrum or a hybrid version of it.

Here's how Scrum works:

• Sprints: time-boxed cycles with specific deadlines
• Reviews: teams assess completed work and adjust priorities after each sprint
• Collaboration: daily standups keep everyone aligned

Scrum defines three key roles:

• Product owner: defines what needs to be built
• Scrum master: removes obstacles and keeps the process running
• Development team: delivers the work

Scrum helps teams respond quickly to change. However, it requires buy-in from everyone, and the focus on short sprints can sometimes overshadow long-term goals.

Kanban

Kanban uses visual boards to track tasks as they move through stages: to do, in progress, and done. The name comes from the Japanese word for "signboard" or "visual card."

Kanban offers several benefits:

• Visual workflow: see all tasks at a glance
• Progress tracking: identify bottlenecks quickly
• Focus: finish current work before starting new tasks
• Centralised information: keep deliverables in one place

Kanban works best when teams manage their time well. Without discipline, the minimalist structure can lead to task overload.

Extreme programming (XP)

Extreme programming (XP) is a flexible framework focused on frequent releases and rapid feedback. Teams work in short bursts to deliver quality output and respond to customer needs quickly.

XP offers several benefits:

• Fast delivery: release work frequently in small increments
• Lower costs: reduce the need for major updates by improving continuously
• Customer focus: use rapid feedback to shape the product

Consider these factors when adopting XP:

• Resource intensive: requires dedicated team time and energy
• High collaboration: depends on close teamwork and frequent customer input

How to implement agile methodologies in your business

Implementing agile transforms how your team plans, collaborates, and delivers work. To get started, you'll need training, cross-functional teams, clear roles, and an iterative workflow.

1. Educate and train your team

Introduce your team to agile through a workshop covering the core principles and benefits. Use real-life examples to show how agile improves business outcomes. Follow up with hands-on training so everyone understands the practices and tools they'll use.

2. Choose an agile framework

Match your framework to your business goals and team capabilities. Consider resource requirements: Scrum needs dedicated roles, Kanban requires disciplined time management, and XP depends on close collaboration and frequent customer feedback.

3. Form cross-functional teams

Cross-functional teams bring together people with different skills to solve problems faster. Build small teams, ideally teams of eight to 12 people, that can manage different aspects of a project independently.

Support these teams by fostering a culture of collaboration, learning, and self-management.

4. Define roles and responsibilities

Clearly define roles within your agile teams. Typical Scrum accountabilities are Product Owner, Scrum Master, and developers.

Make sure everyone knows their responsibilities and how they'll contribute to the team's success.

5. Plan work in iterations

Using the principles of your chosen framework, divide the project into chunks and plan the work in sprints or iterations. Use tools that help your team operate in an agile environment, such as a digital Kanban board.

Hold regular reviews to share and showcase completed work, gather feedback, and make changes. Your reviews should identify clear next steps as part of continuous improvement.

How to measure your success with agile KPIs

Agile key performance indicators (KPIs) measure your team's progress and the effectiveness of your agile practices. Track these metrics to understand what's working:

• Sprint burndown: charts work completed versus time remaining in each sprint
• Cycle time: measures how long tasks take from start to finish
• Team satisfaction: gauges morale through regular surveys
• Output quality: tracks customer feedback on delivered work

Can software help manage agile teams?

Yes, software helps agile teams work more effectively. The right tools reduce admin, improve communication, and keep everyone aligned.

Look for software that can:

• Visualise workflows: use dashboards or Kanban boards to track progress
• Centralise information: store sprint details and project data in one place
• Support collaboration: enable real-time communication across your team
• Integrate with your systems: sync with accounting and business tools like Xero

Popular agile tools include Jira, Trello, Asana, and monday.com. Choose software that fits your team size, budget, and workflow.

Manage your agile business with Xero

Agile helps your business adapt faster, deliver better results, and keep customers satisfied. To make the most of an agile approach, you need a clear view of your finances, automated processes, and real-time insights.

With Xero, you can track cash flow, automate routine tasks, and access up-to-date reports from anywhere. When your financial data is always current, you can make faster decisions and respond to change with confidence.

See how Xero supports agile businesses. Get one month free.

FAQs on agile in business

Here are answers to common questions about agile methodology.

What is agile in easy words?

Agile is a way of working where you complete projects in small steps, get feedback often, and adjust as you go. Instead of planning everything upfront, you improve continuously based on what you learn.

What are the four core values of agile?

The four core values are: individuals and interactions over processes and tools, working products over documentation, customer collaboration over contracts, and responding to change over following a fixed plan.

What does agile mean in a company?

In a company, agile means organising teams to work in short cycles, respond quickly to change, and deliver value continuously. It affects culture, structure, and how decisions get made across the business.

How can you manage agile teams remotely?

Use digital tools and clear communication to keep remote agile teams aligned. While agile traditionally favours in-person collaboration, remote teams can succeed with the right practices:

• Communicate regularly: use video calls, messaging, and phone check-ins
• Choose the right tools: platforms like Zoom, Asana, and Google Meet support remote collaboration
• Clarify sprint goals: make sure everyone understands outcomes and expectations
• Set clear responsibilities: define what each team member owns
• Recognise achievements: acknowledge completed tasks and milestones
• Encourage autonomy: give your team flexibility to manage their own work

Can sole traders use agile methodologies?

Yes, sole traders can use agile principles. Even without a team, you can apply an agile mindset to your work:

• choose a framework that fits your workflow
• organise tasks into sprints or iterations
• focus on continuous improvement

A Kanban board or simple project tool can help you visualise progress and stay on track.