Lean vs Agile vs Waterfall: Which Project Management Methodology is Best?

Scott Batchelor

 Despite recent studies showing that 52% of employers and 43% of employees believe rates of productivity have increased through remote working, organisations globally continue to find it difficult to meet time, cost and scope objectives whilst achieving stakeholder satisfaction. 

In fact, whilst an estimated $8 Trillion worth of projects were delivered successfully throughout 2020, a recent study from KPMG suggests that the change in working conditions actually resulted in confusion for delivery teams, as the project management methodologies they previously used became more difficult to uphold remotely.

Now more than ever it is important to ensure that the development methodologies your business or supplier uses are fitting for the remote delivery of your product, with each option having a different yet direct impact on project velocity and the overall chance of success.

Read on for the pros on cons of three popular approaches to product development: Agile and Lean delivery methodologies, and the implementation of lean principles.

Waterfall

What is Waterfall?

Waterfall is a sequential methodology that is based on a well-defined scope investing heavily on initial requirement gathering and then executed in a set order. This means that as each of the steps of waterfall are successfully completed, the team moves on to the next step.

One of the core principles of waterfall is that development does not begin until a set of thorough scoping exercises have been completed, allowing project delivery teams to accurately map and deliver projects on time.

Waterfall Project Flow Diagram Netsells

What are the Advantages of Waterfall?

The rigid, linear nature of waterfall makes it the perfect choice for simple and precise briefs. It is easy to manage, has specific deliverables and definable start and endpoints.

Because of this delivery teams are also able to define timelines and expenses through an extensive planning phase, which usually happens pre-build. Within this planning period (often called discovery), functionalities, resource availability and expenses are mapped to create an overall cost and delivery date. 

What are the Disadvantages of Waterfall?

Waterfall is less flexible than the alternatives. It struggles to effectively accommodate change and learnings as projects mature over time. The plan has to be sequential and linear and it becomes costly and time-consuming to revisit previously signed off tasks. 

This means that a concrete understanding must be reached and shared by all parties (delivery teams, key stakeholders and end-users) of the functions a product will serve before the build process begins. 

A waterfall methodology ultimately does not leave room for reactiveness or agility. If the market changes, new customer feedback is gained or other ideas are sparked that would otherwise cause the project to pivot, the current waterfall project must first be finished before any major changes can be implemented.      

We spoke to Jason Knight, Product Director at DueDil and host of One Knight in Product Podcast about his experiences working with waterfall in comparison to its main competitor, Agile:

‘Agile with a Big A is not the point, but agility absolutely is. Being able to move fast and pivot as new information comes in, adapt to business reality and team dynamics as they ebb and flow should be considered a competitive advantage. 

I've worked on waterfall projects in the past, spent weeks making detailed plans that then immediately go off track and get worse as they go.’

Netsells project management survey

Is Waterfall a Popular Methodology?

In the Netsells report The State of IT & Project Management in 2020 we found that in a survey of 117 delivery professionals waterfall narrowly missed the top spot for most popular project management methodology, with 80% of organisations opting for agile within their organisation as opposed to 70% using waterfall and only 16% for Lean.

What became clear through the report is that many organisations currently opt for a blended approach, using multiple methods where they are most appropriate. 

Waterfall, for example, excels when project requirements are completely static, but would not be appropriate for the delivery of a complex product that is likely to change throughout the build process. 

When to use Waterfall

  • When a project is short and simple.
  • When requirements are unlikely to change throughout the build process.
  • When the project budget and timeline are greater concerns than functionality and robustness.

Agile

What is Agile?

The agile approach is designed with flexibility in mind. Teams start with a basic project design and break it down into a small series of tasks, which are reviewed, tested and evaluated at the end of each sprint- a time period ranging from 1 week to 1 month that is determined by the delivery team.

These sprints allow for bugs to be identified or client feedback to be incorporated into the design before the next sprint is run. The goal of each iteration is to create a working product function that can be displayed to stakeholders. Feedback can then be incorporated into either current or future modules. 

Agile Project Flow Netsells

What are the Advantages of Agile?

Agile is excellent for projects where the outcome is not clearly defined but the objective is. The build can evolve based on the input of the product team, stakeholder feedback and customer research.

It also allows for ‘true partnerships’ in which the delivery team and client establish a working relationship through frequent check-ins. This means that the final product is more likely to present a shared vision based on professional opinion, up-to-date stakeholder feedback and evolved customer research. 

The result of this is a product that incorporates up-to-date end-user and stakeholder feedback, has had a thorough testing process performed on each functionality, and ultimately, is more likely to succeed.

Anna Stoilova, Co-founder and CPO of data startup TIKI had this to say on the benefits of agile working when building : 

‘Agile is a methodology that is essential for creating and releasing a product in 2021. 

As a CPO of a fast-growing startup, we couldn't successfully make a product by following the old, "linear" way of building the product. We have to constantly iterate, and go in loops of interactions between the development and product design teams while releasing the product to the users early on to get feedback.’

What are the Disadvantages of Agile?

Agile project flexibility can also be its downfall, bringing an increased opportunity for projected timelines and costs to become compromised as the project evolves. A clear set of measurable objectives are key to these engagements to ensure regular alignment.  That being said, this tradeoff between functionality and budget can be discussed with the supplier and decisions made to forego certain processes in favour of time. 

Agile delivery methods can add complexity to resource planning. With no finite end to the build process or a clear vision of what the ‘final product’ looks like, builds can continue for months or even years. The only indication is how close the product is to achieving the goals and how those goals are aligned to value.  

This model is dependent on a project's required tolerance for change. If requirements are concrete and simply need to be executed, then the flexibility of Agile holds little value. However, the rapidly changing landscape of digital products makes this “certainty” increasingly unlikely. 

Is Agile a Popular Methodology?

Agile is now a widespread practise according to the 13th State of Agile Report, with 97% of respondents saying that their organisations practice Agile development methods. However, according to the same report, only 22% of respondents say that all teams at their organisation use Agile.

What is clear is that similarly to waterfall, agile should be employed in projects that suit the method best. As methods of data collection grow more sophisticated, our ability to demonstrate the influence of incremental change becomes easier and more obvious. Due to the increased complexity of different markets (including digital products) agile is now considered one of the best project management methodologies for managing wide-spread change in a cost-controlled manner. 

When to use Agile 

  • When the objectives of a solution are clear but the outcome of the product is not. 
  • When a product needs to rapidly react to changes.  
  • When customer and stakeholder research is ongoing and the data can prove outcomes.
  • You want to take advantage of market changes to deliver a better product.

Lean

What is Lean?

Lean is often confused with agile, and it’s easy to see why. They both dictate a modular approach to product creation, focus on iterative evaluation and involve using end-user testing to create maximum value for the customer. 

However, there are crucial differences between the two that are important to understand when evaluating project management methodologies. For the most part, agile can be considered a process, whilst Lean is considered a principle. 

In order to make any product creation process ‘lean’, delivery teams apply the principles of lean manufacturing to the practice of project management. The goal of employing lean is to reduce wasted time, money and resources by focusing only on the areas deemed valuable by the end-user, removing the rest.

This allows the customer to determine what is important in a product, with teams iteratively re-evaluating in order to make improvements and further reduce waste.

In short: Agile is about building better products. Lean is about improving processes, with better product quality as the intended outcome.

Lean project view Netsells

What are the advantages of Lean?

According to the Project Management Institute, typical short-term improvements of implementing lean principles to ongoing project deliveries include lead-time reductions of 90%, a 35% productivity increase, 15% quality improvement and 20% cost reduction.

By focusing only on what’s necessary, Lean principles are also able to add value per employee, improve profit margins and boost overall efficiency. The truly valuable part of all of this, is that in principle, lean comes with very little trade-off. The processes you remove or alter are not currently providing value, and therefore are not profitable. In this sense there is a lot to gain through lean, but not a lot to lose.

What are the disadvantages of Lean?

Whilst the lean methodology is a powerful tool for reducing time and budget waste, it can’t be considered an instant fix for over-cost or out-of-time projects. 

For Lean to work it requires a high level of involvement from the delivery team, roles can shift if a process is no longer necessary and there is a chance that the entire product lifecycle will need to be altered as a result of the findings. 

It also requires a thorough analysis and understanding of the customer value viewpoint before any changes can be made, which involves extensive end-user research.

Is Lean a Popular Principle?

Implementing lean principles is particularly popular within certain industries, such as Vehicle manufacturing. A complex process requiring a defined output, that evolve to remove cost blockages. Honda and Toyota are considered true champions of this methodology.  

Lean’s popularity in manufacturing comes from the simplistic nature of its principles: Save time and money by removing anything that doesn't add value to the paying customer. By reducing the expenditure necessary to produce one unit of a product, even by a tiny amount, manufacturers can save vast amounts that are otherwise wasted.

When to use Lean

  • When mass-producing a product or item, meaning small savings are multiplied
  • Where efficiency is key to sustainable growth
  • To enable delivery teams to remain focused on 

How to Choose the Right Project Management Methodology?

Choosing the right methodology is crucial for success; It informs how we work, defines the collaborative relationship between supplier and client and ultimately provides the structure that guides us towards success or failure.

There is no one-size-fits-all approach to selecting a successful project methodology, however there are things we can consider to ensure that the most appropriate approach is selected.

Project Complexity

Firstly, it is important to consider the project in terms of its simplicity or complexity. Map things such as timeline, tools, project constraints, available resources and the project itself in order to determine whether the project should be considered.

For straightforward projects a linear methodology like waterfall will ensure time and budget expenditure match the simplistic nature of the work, whilst for complex products an agile approach ensures that every facet of the project is perfected iteratively- translating to higher success rates.

Rigidity

Next, it is important to consider what the appetite for change is like for the project. If you’re working with fixed time, budget and delivery requirements a methodology like waterfall would be best in ensuring key success metrics for speed and delivery are met. 

It is important to consider this point carefully, as choosing the wrong methodology for the project rigidity can massively increase the risk that the project will break time and budget constraints, and, ultimately, could cause the project to fail. 

An important distinction to make at this point is that you should consider the rigidity of the project rather than the rigidity of the team. Whilst team members may be able to be flexible in the approach, the methodology should be tailored to the outcomes of the project. 

For example, adopting an agile approach for a rigid, linear project because the team involved are able to work in multiple capacities can cause over-complication, a breakdown in communication and an overall lack of direction.

Project Values

What does the client, stakeholder and end-user value most? Make a list of their needs and pick the methodology that best fits their needs.

For example, if the stakeholders value being able to review consistently and suggest iterative updates, an agile process may be best. If you were to instead adopt a waterfall methodology in this example, it could add additional pressure to delivery teams as the stakeholders would ultimately not value the way the project is being run. This could result in costly amendments being made post delivery and an increased time to market.

Organisational Values

Perhaps one of the most important steps to choosing a fitting methodology is doing a deep-dive on what your team and organisation values the most. Each team member will have their own habits, opinions and values to work with, and taking a trending methodology and forcing them to use it will most likely result in failure.

By working in a way that fits the outlook of the team you will be able to expand upon traditional project management methodologies to create a unique structure that best fits you and your business. This ensures the sustainability of the working method and ultimately helps to improve the project's chances of success.

Conclusion

The most popular and most versatile methodology, agile, is great for a wide range of projects due to its modular approach. It allows for delivery teams to focus on the most important features in the eyes of the end-user and ensure they are perfect before launch. In addition, the ability to continuously implement end-user and key stakeholder feedback means that the end product is generally stronger, ultimately increasing the chances that the product will be successful.

Waterfall is a great approach to simple, unchanging projects, and is more likely (although not certain) to remain within time and cost budgets due to its unchanging nature and linear approach. That being said, it lacks flexibility and does not allow for delivery teams to implement important end-user feedback without restarting the process, which can prove incredibly costly.

Lean is often confused as a methodology, however, it should actually be recognised as a set of principles designed to reduce waste without reducing value for the end-user. Lean is particularly popular in manufacturing, as any reductions made to the cost it takes to produce a single unit can be multiplied through mass production, saving large amounts of money without affecting the value for the paying customer.

There isn’t a single framework that is the clear best choice 100% of the time, however, some are useful than others in a wider variety of situations. 

Agile, lean and waterfall all have their place within product delivery, what is important is using them in the correct way at the appropriate time, leveraging their merits when the situation requires it.


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