How Do You Use Agile Principles in Organization Design?

  |  October 25, 2017

Agile Organization Design

An Agile Organization is one in which leaders have thoughtfully and intentionally embedded Agile principles into the ways the organization works.  Because the benefits of Agile can be so significant, organizations are exploring how to change traditional ways of working (e.g., project management, life cycle management, etc.) into Agile ways of working (e.g., Scrum, kaizen, etc.).  Agile organizations also adopt new cultural dimensions that can be appealing, like accelerated decision making, rapid learning and innovation, and cross-organizational engagement.

Agile design begins with leadership

If Agile ways of working can enhance the delivery of a company’s strategy, those principles and capabilities must show up in the organization’s design. Organizations need someone that assumes the “Chief Alignment Officer” role. The role of the Alignment Leader throughout this process should not be underestimated because they help connect the organization’s ways of working, structures, roles, talent, metrics, and culture to the organization’s strategy.

To understand the benefit of Agile for organization design, it helps to first understand the product(s) an organization design produces. As we discuss in Chapter One of our book, Mastering the Cube: Overcoming Stumbling Blocks and Building an Organization that Works, organization design is not just about creating an org chart. An effective organization is a manifestation of the collective logic of the organization’s leaders about how the organization is set-up to deliver results.

For example, if the leaders in a business believe that customers have unique preferences or needs in different geographies, then the organization should be set up to deliver its products or services locally. Thus, to operate in a more Agile way, leaders must devise an organization design that changes how people think and act quickly and iteratively while increasing focus on customer collaboration and individuals’ interactions.

That is a tall order and it may be hard for some to see how Agile can help. Especially in large organizations, changing collective thinking and actions can prove challenging, time consuming, and difficult to break into smaller tasks as recommended by typical Agile frameworks.

So, how can Agile organization design speed things up and make the task more manageable?

4 ways to incorporate Agile practices into your organization design

The solution lies in leveraging some of the common Agile practices popularized by our product/software development counterparts and flex them to meet organization design needs. Some of the most important include the following:

  1. The Sprint. Sprints lie at the heart of Agile (and Scrum). At AlignOrg Solutions, we regularly utilize sprints (or design sessions as we call them) to divide the work into smaller incremental steps. A design session allows a small group to work in a concentrated way to complete very specific business or organizational objectives. This enables organizations and leaders to respond to market and customer changes without having to “start all over,” saving valuable time and money.

Additionally, design sessions help focus the work on a few initiatives rather than trying to do everything at once. All too often, business leaders can feel overwhelmed by the number of activities necessary to create change. Design sessions help prioritize the work and the design choices of the organization so that resources and decision making is focused on smaller, yet more strategic chunks increasing implementation success. It also helps avoid spending money on a design only to feel too overwhelmed by the amount of change necessary to actually implement it.

  1. Transparent Communication. Like Scrum, successful design sessions are preceded and punctuated with quick meetings to “inspect and evaluate” the organization design. At the end of each design session, teams share out the results with stakeholders, leaders, and employees to elicit feedback and improve the design in real-time.

Because design sessions (sprints) are highly collaborative, utilizing a variety of leaders, front-line employees, and even external stakeholders from time to time, communication and understanding happens within the flow of work rather than orchestrating it after the fact. High involvement for design sessions from across the organization helps enable clear, more transparent communication and spread the change and buy-in from the very beginning.

  1. Cascade stakeholder/customer involvement. Just like in Agile, design happens in iterations from the broad, strategic design considerations to the more detailed, operational issues and choices. We distinguish between macro organization alignment and micro organization alignment. The team participants for the strategic, macro design questions are often quite different from the stakeholders needed to flesh out the micro design.

As design moves from the macro to the micro level, the stakeholders and customers involved change and move down the organization pyramid. True to Agile principles, trusted customers and key stakeholders should remain involved throughout an organization design to ensure that designs are aligned, relevant, and differentiated from top to bottom. High outside involvement also facilitates the overall organization transformation, minimizes change management needs and speeds up the organization design process as it cascades down the organization.

  1. Team Autonomy. Although there are many ways Agile improves organization design, the last one we will address here revolves around team autonomy, focusing on individuals and interactions over processes and tools,” as stated in the Agile Manifesto. As we’ve seen, good design sessions utilize a variety of people from throughout the organization. To be effective, executives and leaders must allow design session participants an equal voice, encouraging the group to come up with its own solutions through healthy debate and consensus.

Leaders have a distinct role in the process to define the objectives of the team and provide design criteria to guide decision making. Alignment Leaders must trust team members to come up with intelligent, aligned solutions that will resonate with customers and differentiate the company in the market. To create the best and most Agile solutions, there is no substitute for getting the right people in the room rather than relying solely on processes, tools, or off-the-shelf solutions.

While Agile may not look the same in organization design as it does in software development, both follow many of the same principles and can yield similar results. As executives think about their role as Alignment Leaders for their organization—guiding their company through organization design efforts and ensuring strategic differentiation is achieved quickly, Agile principles are a powerful ally in responding to the market needs, increasing overall speed to decision making, and maximizing effectiveness and efficiency.

Leveraging Agile for alignment and results

Using an Agile organization design approach or framework is great, but will that automatically lead to an Agile organization?  Not necessarily. Becoming an Agile organization requires the thoughtful design and alignment of many organization choices.

At AlignOrg Solutions, we use a Rubik’s Cube analogy to describe the coordinated and systematic process of syncing up all aspects of an organization to drive results.  Just as a Rubik’s Cube must have all six sides aligned, an organization needs to have work, structure, metrics, people/rewards, and culture choices lined up to get results. Using an Agile organization design approach, executives can think through how to incorporate Agile ways of working into their organization and culture and transform their organizations and culture into one that is more agile and effective.