Agile Organization Design: Understanding Key Principles

While the software industry has used Agile for many years, it is just gaining steam in other areas of business. Even though Agile has been around for over 20 years, it is still on the upswing in terms of maturity and application.  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 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. They can then 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, work settings or 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, Agile co-founder Jeff Sutherland  developed the “Scrum” methodology. It 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 develop products that fit customer needs, remain flexible to market changes, and help teams become as effective as possible. In Scrum, teams work on a set number of projects and tasks in “sprints”.  These take anywhere from one week to a month to complete. The product owner determines what projects a team will work, but the team decides how they will accomplish the projects and tasks and how many they can do during a given sprint. In addition to team members and the product owner, there is also a “Scrum Master” whose primary responsibilities include facilitating meetings and clearing roadblocks to team productivity.

Teams meet constantly in Scrum. At the beginning they’ll meet to determine the sprint’s scope. They’ll then meet daily to review progress, and at the end of a sprint, they’ll meet 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. It helps teams deliver products (software and others) on time and customized for individual customer needs.  But, what does this mean for organization design?

Leveraging Agile for Organization Design

Can we use the principles of Agile and Scrum to yield a similar result to the success shown 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, 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 the process 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. We’ll provide guidelines on how to approach organization design in an Agile way, and 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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