Agile Organization Design: Understanding Key Principles

  |  August 23, 2017

While the software industry has used Agile for more than a decade, Agile is just gaining steam in other areas of business beyond software development. Even though Agile has been around for 20 years, it is still on the upswing in terms of maturity and application.  Thus, many business functions and areas have yet to experiment with it and determine its usefulness or applicability. For executives, Agile holds the promise of providing great opportunities to differentiate their business and create competitive advantage.

To get the most out of Agile, executives must understand its core principles.  Because in spite of the many practices, techniques and tools that have grown up in the Agile space, it is the principles of Agile that unleash productivity, increase decision making speed, and maximize talent.

Understanding Agile: The Core Principles

The principles of Agile are straightforward. In 2001, a group of software development leaders developed the “Agile Manifesto.” The Manifesto is short and concise with four working principles:

  • Individuals and interactions over processes and tools
  • Working software over comprehensive documentation
  • Customer collaboration over contract negotiation
  • Responding to change over following a plan

Companies and consultants have built numerous frameworks and approaches to leverage these powerful principles.  Because no one approach or framework carries all the benefits of Agile, organizations and leaders need to understand these principles and build, adopt, or adapt the frameworks and approaches that will work best for them. Executives who understand the Agile principles are better equipped to evaluate the effectiveness of different frameworks for their organization.

Additionally, executives should understand that Agile has no single methodology.  Different Agile frameworks are more successful in certain applications and in certain work settings and cultures than others. What works for software development, for example, may not work for a back-office function like customer service, even though Agile ways of working have been incorporated.

Certain frameworks have gained more traction and proven to be more successful than others. For example, “Scrum” is a methodology developed by Agile co-founder, Jeff Sutherland, that essentially eliminates the traditional “waterfall” method of software/product development in favor of his more iterative and flexible solution.  Scrum leverages the principles of Agile. Similarly, there are also many parallels between organization design and Agile principles.

Since it is difficult to have a conversation about Agile without Scrum, let’s take a look at Scrum and the key aspects that make it a powerful Agile approach.

Scrum: Demonstrating Agile Principles at Work

In the simplest form, Scrum is a way to mobilize small teams (six people plus or minus two) to iteratively develop products that fit customer needs, to remain flexible to market/customer changes, and to help teams become as effective as possible. In Scrum, teams work on a set number of projects and tasks in “sprints” that take anywhere from one week to a month to complete. What projects a team will work on is determined by the product owner, but how the team will accomplish the projects and tasks and how many a team can do during a given sprint is up to the team.

In addition to team members and the product owner, there is also a “Scrum Master” whose primary responsibilities include facilitating meetings and clearing impediments or roadblocks to team productivity.

In Scrum, teams meet constantly: at the beginning of the sprint to determine the sprint’s scope, daily to review progress, and at the end of a sprint to review results with stakeholders. In this way, teams are both developing products in an iterative fashion, and also disseminating the “finished products” as they develop the solutions.

Scrum has demonstrated the power of Agile principles to increase production speed, effectiveness, and flexibility, delivering products (software and others) on time and customized for individual customer needs.  But, what does this mean for organization design?

Leveraging Agile for Organizational Design

Can we leverage the principles of Agile and Scrum to yield a similar result to the success demonstrated in software design and development?

We think so!

At AlignOrg Solutions, we have been using Agile principles for some time even before the Agile Manifesto was developed. While organization design and software development are quite different, we have found that Agile principles still very much apply and produce quick, customer-centric, and flexible results.  We do this by:

  • Organizing work into well-defined design efforts
  • Empowering teams to develop organization design solutions that are fit for purpose
  • Engaging leaders early, throughout and at the end to ensure buy-in and support for recommendations
  • Cascading higher-level design decisions down to lower levels of the organization in a systematic and targeted way

In future posts, we will explore some of our learnings from using Agile principles in organization design applications, and provide guidelines for how to approach organization design in an Agile way (and perhaps over time build an Agile organization).

In what ways have you applied Agile principles to your organization? How was your experience?

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