How Do You Use Agile Principles in Organization Design?

An Agile organization is one where leaders have thoughtfully embedded Agile principles into the ways the organization works. The benefits of Agile can be significant, and 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 beneficial cultural dimensions 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 to assume the “Chief Alignment Officer” role. This Alignment Leader helps connect the organization’s ways of working, structures, roles, talent, metrics, and culture to its strategy. Don't underestimate the importance of this role. To understand the benefit of Agile for organization design, it helps to first understand the products 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 one designed to deliver results. For example, business leaders may believe that customers in different locations have unique preferences or needs. The organization should then be set up to deliver products or services locally. To operate in a more Agile way, leaders must devise an organization design that changes how people think and act 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 and time consuming. It can be difficult to break work 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 flexing 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 steps. A design session allows a small group to work in a concentrated way to complete very specific business or organizational objectives. This enables leaders to respond to market 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 can help leaders prioritize the organization's work and design choices.  Resources and decision making can then be focused on smaller,  more strategic chunks, helping increase the odds of implementation success. This also helps leaders avoid spending money on a design only to feel too overwhelmed by the amount of change necessary to actually implement it.

2. Transparent Communication. Like Scrum, successful design sessions are 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. They elicit feedback and use the information to improve the design in real-time.

Design sessions are highly collaborative, utilizing a variety of leaders, front-line employees, and even external stakeholders. Because of this, communication and understanding happens within the flow of work rather than after the fact. High design session involvement helps enable clear, transparent communication and increases buy-in from the very beginning.

3. Cascade Stakeholder/Customer Involvement. Just like in Agile, design happens in iterations from broad, strategic design considerations to more detailed operational issues and choices. We distinguish between macro organization alignment and micro organization alignment. Participants for the strategic macro design questions are often quite different from the stakeholders needed to flesh out the micro design.

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

4. Team Autonomy. There are many ways Agile improves organization design, but the last one we will address here is team autonomy. As stated in the Agile Manifesto, this means focusing on individuals and interactions over processes and tools. To be effective, executives and leaders must give design session participants an equal voice. This encourages the group to come up with its own solutions through healthy debate and consensus.

Leaders are responsible for defining the objectives of the team and providing 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. 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. Agile principles can be a powerful ally for Alignment Leaders as they guide their companies through organization design efforts. They help leaders respond quickly to market needs, increase overall speed of decision making, and maximize 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 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 align work, structure, metrics, people/rewards, and culture choices to get results. Using an Agile organization design approach, executives can determine how to incorporate Agile ways of working into their organization, helping it become more effective.