Almost 20 years ago a bunch of folks, including Kent Beck released the Agile Manifesto. Waterfall planning stopped being the right way to do things. It took a while, but it, and the internet, changed the way a lot of software is developed. Agile, Scrum, Extreme, and Mob programming are all based on the precepts in the manifesto.
15 years later, Kent had a thought
What if those waterfall folks aren’t wrong, what if they are solving a different problem than I’m solving? What problem is that?
This led to his 3X model, eXplore/eXpand/eBtract.
- Explore: Try everything and figure out what you should be doing
- Expand: You know what you want to do. Things are growing almost faster than you can handle. You fix one bottleneck just in time to deal with the next one
- Extract: You've got growth under control. Time to extract value from the system. Economies of scale and efficiency dominate.
At different phases you value different things. When exploring, speed of experimentation and noticing results is key. Lots of things get tried and potentially abandoned if they don't work out. Short sprints and rapid iteration with plenty of feedback.
During expand you follow the hot spots. Quick fixes to buy time to give you a chance to do the work required for the next 6-12 months. Don't bother planning beyond that because things are still too fluid.
Extract, on the other hand. is when longer term planning is critical. Where do you need to be 3-5 years out to extract maximum value? Maybe not traditional waterfall with everything carved in stone at the beginning, but not breaking things along the way is crucial.
Uber as a whole is somewhere between 2 and 3, but different groups/teams are at different stages. Ride share (pre-Covid) has rapid, but stable/predictable growth, and we're extracting value. Eats is expanding. The general idea is understood, and enabling growth is key. ATG and Freight are mostly explore, with some expansion thrown in. But even within those large areas, different teams are at different stages.
That's Agile and 3X. What about 4X? Well, ever play any of the Civilization or Command & Conquer games or Settlers of Catan? One of my favorites back then was Stars!. Those are 4X games. eXplore/eXpand/eXploit(eXtract)/eXterminate. And the mental model is basically the same as Kent's 3X model, with a final phase of eliminating your opponents.
You already know how to think of things in the 3X model. The key is recognizing what phase you're in and adjusting your goals/methodology accordingly. So what stage is your team/group/org at, and are you using the correct approach for it?