What are the 9 factors of a great agile organisation?

Most agile practitioners and coaches will refrain from providing advice on what the perfect agile organisation looks like, because we acknowledge that every situation is different and every organisation needs a way of working that suits their people and the environment they find themselves in.

However, I believe that as we’ve learned more about agile ways of working and the modern management principles that underpin it, we can see that great agile organisations have some key characteristics in common, and will gravitate towards demonstrating them.

I believe this type of organisation will demonstrate nine key characteristics, although the degree to which they do, and how they will achieve it, may be different.

  1. Frictionless redeployment of the company strategy towards new opportunities
  2. Opportunities matched with the capability to capture them
  3. Cross-functional independent teams
  4. Team structures that reform with the changing landscape
  5. Strategy and outcome alignment at all levels
  6. Cohesion at multiple levels
  7. Disruptive thinking co-existing with a continuous improvement mindset
  8. A culture of openness and inclusion with a bias for action
  9. Risk avoidance balanced with the ability to experiment

As an organisation starts to embrace a modern agile mindset, it will begin to move towards demonstrating these nine key characteristics.

Here is the rationale as to why…

 

Frictionless redeployment of the company strategy towards new opportunities

Agile teams embrace change and acknowledge the fact that as we work, we learn more about how and what we should be doing. The lean startup streams of agile embody this mindset and results in teams that embrace opportunities to improve their product. In some cases, this may mean a complete pivot of the product and the abandonment of existing plans, but this is something that is embraced, not avoided.

Embodying the mindset that opportunities are always changing infers the need for companies to be able to redeploy their company against a new strategy, targeting new opportunities, with minimal friction. Any resistance preventing the ability to pivot the business at enterprise scale results in missed opportunities in this type of environment.

What this looks like

A great agile organisation will demonstrate the ability to rapidly pivot toward new opportunities and stop investments in unimportant activities in a frictionless way.

 

Opportunities matched with the capability to capture them

Agile teams understand that no piece of work is ever the same. Nor is the environment they work within. The combination of these two factors means that the problems they are trying to solve are ever-changing. More importantly, agile teams accept that even if their team compositions are stable and don’t change, they will need to be uplifting their skills and capabilities in order to remain relevant and effective.

In this type of environment, teams understand that they are constrained in only being able to pursue opportunities that are within their current capabilities and skill-sets. Doing otherwise leads to teams working on non-feasible solutions given the technology and skills available to them.

With this mindset, a team understands this constraint. They also keep a keen eye on the future and the capabilities that they need to obtain in order to capture future opportunities. This future focus translates into a company that is continuously enhancing its capabilities to be ready for its next opportunity, while continuing to deliver value by focusing on the opportunities it can capture here and now.

What this looks like

A great agile organisation pursues opportunities that are linked to their capability to do so, but continuously evolves its capabilities to be ready to take on future opportunities, even if those opportunities are currently unknown.

 

Cross-functional independent teams

Cross-functional independent teams are the most explicit of requirements for agile organisations. Although simple in theory it is much harder to put in place in practice. When looking at the company from a bigger picture perspective, most teams are formed as semi-cross-functional teams. This is because they are often formed around only a portion of the company’s true end to end value stream.

Teams formed this way are never truly independent because they depend on up and downstream teams to help deliver value. This occurs because we have the tendency to create teams around areas within our control and not based on the actual value-stream of the product we are working on.

Expanding our thinking to focus on a complete value stream (one that includes discovery, problem validation, concept validation, delivery, release, launch and any other activities involved in building a successful product), changes the definition of what makes up a cross-functional team.

As the ability to consume technology makes it easier, the reliance on technology specialists is reducing. This enables a broader, more diverse set of skills to come to bear in deploying technology solutions. Embracing a cross-functional team mindset means that a company will understand that the definition of a cross-functional team changes depending on the type of problem a team is trying to solve.

An agile company will continuously review the types of problems it is trying to solve for and design cross-functional teams based on the different skills required, as the problems change over time. As the ability to leverage more diverse skills increases due to the consumerisation of technology, it will continue to restructure teams to have the least dependencies possible.

What this looks like

A great agile organisation will understand that as the opportunities we are pursing change, so do the skills we require. As their ability to consume complex technology increases they will continuously review and adjust their team structure to ensure they retain truly cross-functional independent teams.

 

Team structures that reform with the changing landscape

Traditional organisations often resist changing organisational structures due to the change impact it introduces. Agile organisations understand that as our business landscape changes, the structures we have in place may not be suitable to address the new opportunities that emerge. Instead, an agile organisation looks to enable team structures that can easily reform with the changing business landscape.

Static structures age and decay over time. This means that, if a structure is fixed, there comes a time when the structure no longer fits the challenges we are facing. Agile organisations focus on reducing the resistance to organisational change by leveraging approaches such as facilitated advocacy and people led change.

Alternate approaches such as self-selection enable approaches for conducting organisational restructures that reduce change resistance and instead result in higher levels of engagement and excitement during the change.

What this looks like

A great agile organisation understands that as the opportunities we are pursing change so does the organisational structure that is best suited to pursing those opportunities. Rather than avoiding structural change an agile organisation reduces the resistance to change and encourages teams to actively reform their structure to match the changing business landscape.

 

Strategy and outcome alignment at all levels

One of the greatest strengths of an agile organisation is the ability to leverage the collective strengths of all individuals in the company. This ability to do this, however, requires team members to have high levels of alignment around what a company is trying to achieve. This enables them to demonstrate higher levels of autonomy, as well as alignment to the company’s goals. This is commonly referred to as self-organisation in the agile space, and at scale, self-organisation results in the increased ability for teams to take action in a constantly changing environment.

Because the focus is to enable autonomy and alignment towards achieving a common goal, and the expectation is that the environment will change, an agile organisation understands that it is more important to align on the strategies and the decision making process it will follow rather than the plans it produces.

An agile organisation looks to build alignment around strategy at all levels ranging from stratospheric business strategies down through to the delivery strategies a team will follow. The alignment around the decision making process increases the ability for teams to make high-quality decisions as the environment changes and continue to move in the direction the company is aiming for.

What this looks like

A great agile organisation builds alignment around the outcomes it is trying to deliver as well as the strategies it will employ to make decisions. It enables high quality decentralised decision making by ensuring every team and individual is able to make decisions that are consistent with the company’s overall goals even as the business environment changes.

 

Cohesion at multiple levels

Agile organisations are extremely good at creating highly cohesive autonomous teams; however, one of the pitfalls of building highly cohesive teams is that they can quite often result in lower levels of cohesion at department and company levels.

As agile has evolved, teams have learned that there is a need to build cohesion at department and company levels to reduce the frequency at which a team optimises their local team factors at the expense of the greater good of the company.

Structures such as Spotify’s tribe, chapter, guild model are approaches of building cohesion across a range of dimensions.

What this looks like

A great agile organisation seeks to build broad company cohesion balanced with team level cohesion to ensure that teams are highly effective but still willing to sacrifice their short term objectives for the greater good of the company.

 

Disruptive thinking co-existing with the continuous improvement mindset

Often considered to be opposing mindsets, agile organisations have grown to understand that disruptive thinking and the continuous improvement mindsets co-exist in every individual. Attempting to compartmentalise the activities into different parts of a company reduces our ability to leverage the collective power of all individuals in the company.

Instead, an agile organisation understands that each individual can contribute to both disruptive innovation and continuous improvement activities. Rather than separating the two, it is more important to help individuals understand the problems that they are trying to solve, and the type of mindset required for the given problem.

A company like Toyota values the knowledge of every individual within it. While delivering product innovations such as the hybrid electric/petrol technology within the Prius, they have still maintained their reputation as a leader in the application of the lean continuous improvement mindset.

What this looks like

A great agile organisation encourages disruptive things and a continuous improvement mindset in all individuals. It improves the ability for its team members to understand the problems they are solving for and the ability to appropriately use the right type of mindset for a given problem.

 

A culture of openness and inclusion with a bias for action

Agile environments encourage diversity in all its forms due to the improved outcomes it achieves through innovation and creative thinking. Different perspectives are embraced for the radical ideas they can bring; however, agile teams understand that this can also lead to analysis paralysis when looking for the perfect solution and requiring consensus among all individuals.

Instead, an agile organisation understands the importance of positive momentum and encourages a bias for action. An agile organisation values playing in the right ballpark rather than finding the one perfect answer. Because they work in short iterations, agile teams are comfortable in not working on the one perfect solution because they are always confident that they will be working on one of the most valuable opportunities available at any given time.

What this looks like

Great agile organisations embrace diversity and provide an inclusive working environment but also demonstrate a bias for action. They encourage the ability to commit quickly to action, even as a diverse team by ensuring it is always working on a valuable idea through the use of short decision cycles and incremental, iterative delivery.

 

Risk avoidance balanced with the ability to experiment

Although risk avoidance is valuable in some contexts, it is highly costly to do so. Agile organisations instead encourage the ability to experiment safely by making it easier and quicker to find problems and subsequently recover from them.

By making it safe to fail, agile organisations encourage the ability to experiment safely, leading to positive customer outcomes for the product sooner.

What this looks like

A great agile organisation balances the costs associated with a company’s need to avoid risks with a more targeted approach of being able to quickly detect and recover from issues quickly. Instead of attempting to guess and protect against every possible thing that could occur, they focus on learning what the real problems are, to avoid catastrophic outcomes in a cost effective way.

 

Growing an agile organisation

As a company adopts an agile mindset, they will ultimately move closer to exhibiting these nine characteristics over time but how they get there will be different. The level and pace at which they do so will also be different and is largely dependent on how much the company and its leadership team is willing to commit to shifting the culture and operating model of the company.

It requires constant support and a persistent focus in moving towards what great looks like but hopefully, these nine key factors provide enough of a view to get you started.

Agile is not always for everyone, but I believe our future working environment and the accelerating pace of change that the fourth industrial revolution will bring, will require it to be.

Good Luck!

This blog was originally published on Medium, click here to read more from Peter Lee.