Adapting Agile Principles for Improved Organization Design

May 10, 2018

Adapting Agile Principles for Improved Organization Design

In today’s rapidly evolving, high-tech marketplace, many organizations are turning to agile ways of working (such as scrum and kaizen) to enable more rapid decision making, accelerate innovation, and improve delivery of strategy. If this is to be done successfully, these new ways of doing things must be intentionally incorporated into the organization’s design. Leaders must therefore first be aware of their own role in the transformation journey to a more agile approach, as well as 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 new or even foreign to an organization’s existing structures and culture, it is helpful to designate someone to take on the role of “Chief Alignment Officer.” This person is someone who understands both new and old ways of doing things, and is able to connect all of the company’s organization systems—work processes, structures, roles, metrics, talent, and culture—to its strategy.
 
This leader, along with the rest of the organization’s leadership team, needs first to understand the organization design principle outlined in chapter one of our book, Mastering the Cube: Overcoming Stumbling Blocks and Building an Organization that Works: all systems must be aligned to strategy. For example, if the leaders agree that customers in different regions have different needs that must be met, then a local delivery system is a logical solution. To support agile ways of working, therefore, leaders must design an organization that encourages quick, iterative thought and action and facilitates collaboration between individuals.
 
This is easier said than done, especially in larger organizations which are not structured to handle breaking tasks into smaller chunks as agile frameworks typically recommend, and where attempts to change existing behavior patterns may be time consuming and challenging. Some might wonder, “How can agile organization design help save time and effort in my organization?”
 
4 Agile Practices Leaders Can Leverage for Improved Organization Design
The solution is to become familiar with agile principles used in product/software development (the origin of the agile approach) and adapt them to meet the needs of an organization’s design. There are many ways agile can improve organization design including the following:
  • Sprints (or design sessions as we call them). Work is divided into incremental chunks targeting very specific objectives, which are worked on intensely and collaboratively by a small group within a short period of time. This helps the organization better prioritize the work, use resources wisely, and respond quickly and efficiently to the demands of the market and customers with minimal risk and overhead.
  • Transparency in Communication. The quick, collaborative nature of agile design sessions, which often pull in leaders and employees from across the organization (along with the occasional external stakeholder), requires clear, transparent, and virtually continuous communication. Quick inspection/evaluation meetings before and during design sessions are the norm. Once a session comes to a close, results are shared widely and the teams receive feedback which is then used 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 these different 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. Outside involvement is encouraged; engaging the perspectives of trusted customers and other key external stakeholders helps to minimize need for change management and accelerate the process of organization design at all levels.
  • 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 participants are given an equal voice, regardless of the organization level they belong to. 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 as well as decision making guidelines, trusting their team to create strategically aligned solutions that support marketplace differentiation and meet the needs and desires of customers. 

While organization design and software development appear to be very different disciplines, at their core they share many of the same principles. It is therefore not surprising that using an agile approach can create similar results in efficiency, effectiveness, and speed, and that many executives, like their software developer counterparts, are turning to agile methods to strengthen and accelerate efforts to transform their businesses.

Incorporating Agile Into Organizational DNA
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 very helpful to use a Rubik’s Cube model to visualize the process of systematically and 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. Using this model, leaders can consider ways to bring agile ways of working to bear to transform their organization into one that is more flexible, resilient, and agile for more powerful differentiation and performance in the market. 
The Authors: 

Principal of AlignOrg SolutionsReed Deshler specializes in developing strategic organization designs and helping companies bring them to fruition. He has guided organizations, including 3M, Abbott, Hertz, Chevron, Cisco, and General Mills through change successfully and helped them solve complex organizational challenges. Reed is co-author of Mastering the Cube: Overcoming Stumbling Blocks and Building an Organization that Works. He regularly writes and speaks on issues related to organization transformation and ways to implement—and create buy-in—among stakeholders for new business designs.

To learn more about organizational transformation, download AlignOrg Solutions’ complimentary guide, Winning Practices of Organization Transformation COEs