- Agile project management techniques, such as iterative sprints and granting workers task autonomy, have become commonplace in many organizations. We experimentally examine how these techniques affect performance in two innovation settings: (1) a product development setting, represented by a task in which participants build connected word structures using letters of the alphabet, and (2) a business model innovation setting, represented by a task in which participants search for the best combination of business attributes on a multidimensional solution landscape. Our results suggest that the effects of Agile on performance are not uniform and depend on the innovation setting and on the performance measure. Agile improves average performance in the product development setting but lowers average performance in the business model innovation setting. In both settings, Agile techniques lead to more incremental (less radical) strategies, which narrows performance variance. Together, theseAgile project management techniques, such as iterative sprints and granting workers task autonomy, have become commonplace in many organizations. We experimentally examine how these techniques affect performance in two innovation settings: (1) a product development setting, represented by a task in which participants build connected word structures using letters of the alphabet, and (2) a business model innovation setting, represented by a task in which participants search for the best combination of business attributes on a multidimensional solution landscape. Our results suggest that the effects of Agile on performance are not uniform and depend on the innovation setting and on the performance measure. Agile improves average performance in the product development setting but lowers average performance in the business model innovation setting. In both settings, Agile techniques lead to more incremental (less radical) strategies, which narrows performance variance. Together, these results caution against uniform adoption of the Agile approach, and suggest that the choice of the approach should depend on the nature of the project and on the desired risk-return profile of the firm.…
