When an organization is designed around self-motivated teams of highly engaged, high-energy, entrepreneurial individuals, it will be able to adapt rapidly to market changes in a productive and cost-effective way, resulting in business agility.
As pointed out in the article designing organizations that are built to change:
“Many executives talk about the need for greater flexibility and adaptability from their companies. But the truth is that most businesses have organized themselves in ways that inherently discourage change.” … ”The truth is that the effectiveness of change efforts is largely determined by organizational design, or how a company’s structure, processes, reward systems and other features are orchestrated over time to support one another as well as the company’s strategic intent, identity and capabilities. In a world that is perpetually changing, an organization’s design must support the idea that the implementation and re-implementation of a strategy is a continuous process. However, a number of traditional organizational design features tend to discourage — and not encourage — change. Thus, to transform themselves into organizations that are “built to change,” companies need to rethink a number of these basic design assumptions.”
The departure from the traditional hierarchical organizational structure and line of authority is described by Brian Lucas as a fundamental change in philosophy. Quoting from his article the imperative of having an agile organization structure:
- no fixed or assigned authority
- sponsors (mentors) not bosses
- natural leadership defined by followership
- person-to-person communication
- objectives set by those who must make things happen
- tasks and functions organized through commitments
In the five traits of an agile enterprise, Michael Hugos pictures this change as follows, transforming The Boss into an Enterprise Coordinator:
Quoting from his blog at CIO.com:
- Agile organizations replace command and control with training and trust. They are structured to provide their business units with the flexibility they need to decide and act on their own within broadly defined parameters set by senior management. People are empowered to do whatever is legal and not expressly prohibited instead of only doing what is specifically permitted. A network organization structure enables freedom of action.
- Participatory senior executives actively create the environment for middle managers and employees to succeed. They guide their companies with clearly defined goals and performance targets that are not stated just in financial terms.
- Senior executives in agile companies focus on the essentials; they take care of their people; and they do not micromanage. They seek out and exploit opportunities to diversify into new markets. They figure out what needs to be done and give people clear objectives and performance targets, and then they get out of the way. They tell their people WHAT to do, and let them figure out HOW to do it.
- Entrepreneurial employees are the energy that makes an agile enterprise come alive.
Concluding with some advice on how to find the right people: seek to hire employees who are real travelers, not tourists. Quoting from Artie Debidien during her presentation at CIO day:
“Travelers know where they want to go and what to put in their backpacks. Tourists just wander around, watch, learn and then leave.”
Suggestions for further reading:
- Characteristics of Agile Organizations: As Agile Methods have become one of the predominant ways for successful software development, we are increasingly confronted with the question: “How can the mindset and associated benefits of Agile pervade the entire organization?”.
- Scaled Agility: The Project Forum is an application of agile philosophy to large project structures. Rather than impose a hierarchy of decision making from the Project Manager downwards the Project Forum is a virtual team in the middle of all stakeholders.
- The Big Picture of Enterprise Agility: describes an organizational, process and requirements model for implementing agile methods at enterprise scale.
- Scaling Agile at Spotify: Dealing with multiple teams in a product development organization is always a challenge. One of the most impressive examples we’ve seen so far is Spotify, which has kept an agile mindset despite having scaled to over 30 teams across 3 cities.