“Adapting Agile Principles for Improved Organization Design” was originally published by HR People & Strategy in May 2018.
In today’s rapidly evolving high-tech marketplace, many organizations are turning to Agile ways of working. Tactics like Scrum and kaizen can enable more rapid decision making, accelerate innovation, and improve delivery of strategy. For these to be successful, new ways of doing things must be intentionally incorporated into the organization’s design. Leaders should understand their own role in the journey to a more Agile approach and know how to incorporate Agile practices into the business’ organization design.
The Leader’s Role in Agile Organization Design
An effective organization embodies the common understanding shared by its leaders about how it is structured to deliver value. Because Agile ways of working are often foreign to an organization’s existing structures and culture, it is helpful to select someone to take on the role of “Chief Alignment Officer.” This should be someone who understands both new and old ways of doing things. They should be able to connect all of the organization’s systems—work processes, structures, roles, metrics, talent, and culture—to its strategy.
This leader, along with the rest of the leadership team, needs first to understand the organization design principle outlined in chapter one of our book, Mastering the Cube: All systems must be aligned to strategy. For example, if leaders agree that customers in different regions have unique needs that must be met, then a local delivery system is a logical solution. To support Agile ways of working, leaders must design an organization that encourages quick, iterative thought and action and facilitates collaboration between individuals.
This is often easier said than done. Agile frameworks often recommend breaking tasks into smaller chunks, but large organizations may not be designed to facilitate this. Attempts to change behavior can be hard and time-consuming. Some might wonder, “How can Agile organization design help save my organization time and effort?”
The solution is to become familiar with the Agile principles first used in product and software development. These principles can then be adapted to meet the needs of an organization’s design and improve it in many ways.
Four Agile Principles Leaders Can Leverage for Improved Organization Design
- Sprints (or design sessions, as we call them). Leaders should divide work into incremental chunks targeting very specific objectives. Then, small groups can work intensely on them for short periods of time. This helps the organization better prioritize work, use resources wisely, and respond quickly to market demands with minimal risk and overhead.
- Transparency in Communication. Agile design sessions are quick, collaborative and pull in employees from across the organization, along with the occasional external stakeholder.
To be successful, these require clear, virtually continuous communication. Quick inspection/evaluation meetings before and during design sessions are the norm. After the session ends, results are shared and teams use the feedback to initiate real-time and future improvements.
- Cascading Involvement of Stakeholders and/or Customers. Agile organization design proceeds iteratively from broad strategy (macro design) to detailed choices and operational issues (micro design). Typically, different teams are involved in the separate phases of work. As the design shifts from macro to micro, the individuals involved tend to come from lower levels of the organizational pyramid, so that the organization remains aligned and relevant top to bottom. During these steps, leaders should encourage outside involvement. Engaging the perspectives of trusted customers and other key external stakeholders helps lessen need for change management and accelerate the organization design process.
- Autonomous Teams. One of the principles of the Agile Manifesto is to focus on “individuals and interactions over processes and tools.” In an effective design session, all members are given an equal voice. Constructive debate and consensus are encouraged, and the team is given freedom to come up with its own solutions. The Alignment Leader’s role is to define their team’s strategic objectives and decision making guidelines. They should trust their team to create aligned solutions that support marketplace differentiation and meet customer needs.
Incorporating Agile Into Organizational DNA
While organization design and software development appear to be very different disciplines, they share many of the same principles. It is not surprising that using an Agile approach can create similar results in efficiency and effectiveness. As a result, many executives are turning to Agile methods to speed up their business transformation efforts.
While using an Agile framework or design approach offers many benefits, doing so will not necessarily create an Agile organization. If that is the goal, many organization choices must be carefully considered and aligned. We have found it helpful to use a Rubik’s Cube model to visualize the process of strategically aligning an organization for improved results. Just as turning one side of the cube affects all others, choices made in one organization system, such as metrics, culture, work, structure, or people/rewards, will affect all the others.