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Designing agile organizations

A recent article in the Harvard Business Review discusses the experiences of large organizations implementing agile practices within their operations. The article does an excellent job outlining why agile is important, and what some of the key components are to implementing it successfully. What’s particularly interesting is that many of the examples used are of organizations that have implemented agile practices without radically changing their organization’s design. That’s important because agile, and more traditional organizational design, are often portrayed as conflicting with each other. We believe this is not necessarily the case, and this article will explore three concepts in which our Optimizing Organization Design® approach can provide the foundation necessary for implementing agile within your organization. This builds off of the recent presentation I gave with Chris Becker at the Requisite Agility conference in New York.

Clearly, and appropriately, delegated authority

The terms “authority” and “agile” seem, at first glance, a little conflicting of each other. Authority is often used when describing large bureaucracies, while agile is considered innovative and forward thinking. But let us tell you why they aren’t conflicting, and why authority alignment is actually a good place to start when effectively implementing agile. Authority should be delegated down the organization – meaning that employees at all levels of the organization have the appropriate authority necessary to do their jobs. Simple enough right? The issue that we see, and what causes bureaucracy, is that too much authority often resides with too few people at the top of the organization. An effective organization design can provide a framework where authority is appropriately delegated. This allows the right leaders the necessary authority to bring together cross functional, agile, teams designed to respond to a specific customer problem or solve a specific business requirement. The formation of teams can happen rapidly, without leaders requiring unnecessary sign-offs and approvals, allowing organizations to respond to their customers in continuously changing business environments.

Accountability-driven, cross functional teams

Once agile teams are mobilized, how should they operate? In order for the teams to be successful, business leaders need to be clear on what the teams are accountable for. Rather then prescribing a specific approach the team should take, leaders should delegate an accountability to the team for solving a specific problem. This delegation should also include the delegation of resources (e.g. time, money, people). A great analogy used in the HBR article was that these teams could then operate in a venture capital (VC) like atmosphere. The team would continue to work on the solution to the problem with regular touch points, and the leader can continuously make value-based judgments as to whether they are going to continue to “fund” (provide resources to) the team, based on the return on investment and opportunity cost to the business.

Using iteration to achieve a long-term vision

The thinking that agile and long-term planning don’t coincide is a common misconception. Leaders should always be looking and planning into the future, but how they approach this may be different. In the past, an organization’s business plan may have contained specific steps to achieve an outcome – but now, business plans are more problem and solution focused. For example, an energy company may be looking to fully move into renewables by 2030. The problem is clear, but the steps to get to the solution are not. If this is the broader organizational problem that the CEO is accountable, specific problems or challenges within that should be delegated down. There may be a Vice President looking at green-tech acquisitions, or an agile team introducing new technology to market. Either way, these solution-focused pieces of work should be handled at the right levels. Optimizing Organization Design® has an approach to ensuring this is the case, and in an agile environment, this means that people and teams are focusing on the right kinds of problems.

Next time you’re looking at implementing agile within your organization, ask yourself if your organization is designed in a way that you’ll be able to achieve the maximum benefit. If you’re interested in knowing more about our Optimizing Organization Design® approach, or specifically the interaction between our approach and agile, please don’t hesitate to contact us.

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