How to structure an adaptive organisation

Agile business empowers employees as well as boosting returns to shareholders. Evan Leybourn says it’s a matter of picking the right way to manage staff.

With all the talk of Zappos adopting a holacratic business model, it seems that lean and agile business models are gaining interest across different business sectors. This is adding to the growing group of companies starting to adopt Agile Business Management, that is the agile principles and techniques outside of IT.

The Sad Truth

The sad truth is that there are very few truly agile corporations, and for an organisation to be completely agile requires such a mindshift that very few have attempted.

Good corporate governance is about getting hundreds, if not thousands or hundreds of thousands, of employees all working in harmony towards common goals on behalf of the shareholders. Governance processes help ensure that managers are making appropriate business and financial decisions and adequately controlling quality processes.

However, this tends to translate into rigid structure and the centralisation of authority. Compare this to the Agile Manifesto:

1.       We value individuals and interactions over processes and tools.

2.       We value completed customer requirements over comprehensive documentation.

3.       We value customer collaboration over contract negotiation.

4.       We value responding to change over following a plan.
It takes a brave company to change its governance processes, let alone its organisational structure.

An agile structure

Those organisations that are willing to take the risk and associated reward involved in being an adaptive business will often apply both agile management and agile work practices, but disregard the importance of an agile organisational structure.

An organisation that is positioned to adapt to the changing needs of their customers needs an organisational structure that is both efficient and highly functional. This means a change in the way we think about our organisation. Rather than see the organisation as a pyramid, with executives at the top, graduates and entry-level positions at the bottom, start to think of it has a bee-hive. There are hundreds of cells, collaborating towards common goals and outcomes but independent in action.

An agile organisation achieves this by reducing structural hierarchy through the creation of semi-autonomous, self-organising and cross-functional teams. In this environment, a single, mid-level manager should be capable of supporting 10 to 20 cross-functional teams, comprising between five and nine full-time staff.

There are three concepts you need to understand about an agile organisation:

1: Cross-functional

Cross-functional teams contain all the key skills required to deliver the needs of their customers. Unlike traditional hierarchical structures, cross-functional teams are responsible for the delivery of a product or service from design to completion and should not need input from, or handover to, other teams.

Benefits to this integration include

·         Faster delivery times by reducing handover and communication delays

·         consistent ownership of work

·         rapid response to new issues

·         improved information sharing across the organisation.

The best cross-functional teams integrate the customer representative within the team and share the accountability for delivery.

2: Self-organising

Self-organising teams have the authority to create a functional, internal team structure by reorganising team members as needed.

Individual team members will have specialisations and preferences but may not be as productive if they take on work outside their core skills. However, you will need a good coverage of skills to ensure role coverage.

There is a productivity penalty for context switching; you want team members to focus on a specific role and switch only as required.

Staff who can take on multiple roles, tend to be more creative in their work. The customer’s requirements drive the structure of the team and often require multiple team members in the same role.

3: Self-managing (or empowered)
By far the largest bottleneck to organisational agility is the management needed to ensure that team outcomes align to customer expectations and corporate strategy.

Trust is the most important factor in developing empowered teams. Trust comes from communication and respect. A team facilitator may be used to simplify cross-team communication, ensure consensus within a team and align with corporate expectations. Ideally this should be an ordinary team member.

Risks

Agile organisational structures are not without their risks. Understaffed teams may not be able to meet their customer’s expectations, a team may lack members with required or specialised skills, or individuals may be unable to dedicate the time required to the team.

Final Thoughts

There are a lot of processes, techniques and frameworks under the agile umbrella that can be applied outside of ICT. But, whatever the ultimate goals, an agile organisation emphasises adaptability and customer interaction, but needs to remain aligned to the core agile values.

Evan Leybourn is an experienced leader, coach and published author in the developing field of Agile Business Management; applying the successful concepts and practices from the Lean and Agile movements to corporate management. Evan has a passion for building effective and productive organisations, filled with actively engaged and committed staff while ensuring high-levels of customer satisfaction. Evan’s experiences when holding executive and board positions in both private industry and government has driven his passion for lean business management. Twitter: @eleybourn, blog: http://theagiledirector.com. ‘Directing the Organisation’ is published by IT Governance Publishing.