In today’s fast-paced and technology-driven economic landscape, companies face the challenge of bringing innovations to market quickly while remaining efficient and customer-focused.

Against this backdrop, strategic agile product development offers a solution. It combines the flexibility of agile methods with a strong focus on long-term business goals and customer needs. This approach enables companies to not only respond to current market trends but also proactively shape the future of their industry. In a time when adaptability and speed are crucial, strategic agile product development provides a framework for staying innovative and competitive.

Anyone who now believes that everything must be done anew, that all processes and structures must be redefined, is mistaken. All companies that operate independently in the market inherently possess sufficient adaptability. Otherwise, they would no longer exist. However, many companies are finding that maintaining this adaptability increasingly requires more effort and money. This expense reduces the already diminishing margins for commodity products and simultaneously means that funds for developing new products and services are lacking.

What is it about? Strategic agile product development is a project management approach that combines the principles of agile development with a strategic focus on business goals and customer needs. It is designed to enable companies to quickly adapt to changing market conditions and customer needs while pursuing a long-term vision for their product development.

The key principles of strategic agile product development are:

Customer Orientation:

The development process is driven by a deep understanding of customer needs, preferences, and behaviors, with the goal of creating products that meet these needs and provide added value to the customer.

Iterative Development:

The development process is divided into smaller iterative cycles or sprints, each focusing on delivering a specific set of features or functions.

Interfunctional Collaboration:

The development team consists of people from different functional areas, such as design, engineering, and product management, who work together to deliver the product.

Continuous Improvement:

The development process is continuously evaluated and improved to increase efficiency, quality, and effectiveness.

Strategic Alignment:

The development process is guided by a strategic vision or roadmap that aligns with the overall business goals and directives of the company.

Example “Smart Manufacturing System”

The company is developing a system that includes production machines, monitoring and control software, and AI algorithms to optimize production.

Customer Orientation: The company regularly conducts customer surveys and workshops to obtain direct feedback from end-users. Based on this feedback, the system’s functions are adapted to meet the specific needs of industrial customers, such as efficiency and cost reduction.

Iterative Development: In each development phase, a functional prototype of the system is created, starting with physical engineering, followed by software development, and finally the integration of AI. After each cycle, the system is tested and improved based on the test results.

Cross-functional Collaboration: Weekly coordination meetings between mechanical engineers, software developers, and AI specialists ensure effective communication and problem-solving in integrating the various system components.

Continuous Improvement: The development team continuously analyzes the performance data of the system and collects feedback from users in the factory to identify and implement improvement opportunities.

Strategic Alignment: Through regular coordination with the development teams, the management team ensures that the development of the Smart Manufacturing System is in line with the overarching company strategy and the goals of the Industry 4.0 initiative.

Product Development and Product Portfolio

In many companies, work is still predominantly segmented, i.e., different departments operate independently, often leading to communication barriers and inefficient processes. This can result in problems such as delayed decisions, duplication of work, and lack of coordination between teams.


The traditional structural principle of ‘segmentation by responsibilities’ often leads to a segmentation or division of the process, resulting in a ping-pong effect between departments and responsibilities. This causes well-known problems such as failure to achieve project goals, lack of coordination, and unclear priorities and responsibilities. An alternative is ‘problem-oriented thinking,’ where responsibility for the entire process, from customer to customer, remains with a dedicated team.

Therefore, suitable methods and approaches are needed to help the company efficiently respond to changing requirements and develop innovative solutions that meet both technical and business needs.

Methods and Approaches:

For our Smart Manufacturing System, specific methods and approaches could look as follows:

Cross-functional Teams: A team of engineers, software developers, and AI specialists collaboratively works on developing and integrating machines, software, and AI algorithms. For example, a software developer might work with a mechanical engineer to ensure effective interaction between the AI software and the machine hardware.

Regular Coordination Formats: Agile methods such as Scrum or Kanban are used to organize regular meetings like Daily Stand-ups, Sprint Planning, Reviews, and Retrospectives. These meetings serve for coordination and exchange among team members about progress and challenges.

Portfolio Planning: The company could use software like Jira or Microsoft Azure DevOps for agile portfolio management. This allows flexible adjustment of project priorities based on market trends and customer feedback.

Leadership: Leaders foster a culture of dynamic robustness by granting teams the necessary autonomy, supporting experiments, and thus creating an environment that encourages continuous learning and adaptability.


The benefits of strategic agile product development include shorter time-to-market, higher customer satisfaction, and the ability to quickly respond to changing market conditions. It also enables companies to offer products that meet the evolving needs of customers while maintaining a long-term strategic vision for product development.

Note: In dealing with innovative management approaches, there are occasional calls for a comprehensive departure from traditional structures and practices. These perspectives demand a profound transformation towards complete self-organization and extremely dynamic processes that fully replace traditional planning and control approaches. While such approaches can be inspiring and forward-looking, they must still prove to be implementable and sustainable in various corporate environments and cultures. It is important to critically examine these innovative concepts and carefully assess their applicability in the real business world.