Five Pillars of Agile Organisations

Quick changes, flexible resources

“Boxes and lines� less important.

Focus on action

Top-down hierarchy Bureaucracy

Detailed instruction

Silos Leadership shows direction and enables

Team built around end-to-end accountability action

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Contents

» Overview Pillar » Strategy Pillar » Structure Pillar » Process Pillar » People » Technology Pillar

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These changing times are pressing organizations to become agile—this Article deliberates on the 5 pillars of Agile Organisation Article Overview Traditional organizations are often static, siloed, and comprised of a bureaucratic rigid hierarchical structure where control and decisions flow top-down. Such structures are strong but lack agility.

Agile organizations, on the other hand, execute quickly, empower their teams to act nimbly, have quick decision cycles, based on a shared purpose to create value for shareholders.

1 Strategy

4 People

2 Structure

5 Technology

3 Process

We also deliberates on the strategic mind shifts and core agile practices mandatory to bring about this Agile Transformation.

These pillars enable organizations to achieve stability and dynamism, and leverage unprecedented opportunities to thrive.

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The agile organization is emerging as the foremost organizational model today New Organizational Paradigm – Agile Organizations Traditional organizations are often static, siloed, where decisions cascade top-down, operating in a linear control structure. Such structures are rigid and lack agility. Agile organizations, on the other hand, execute quickly, empower their teams to act nimbly, have quick decision cycles, based on a shared purpose to create value for shareholders … to organizations as “organisms”

From organizations as “machines” …

Quick changes, flexible resources

Agile organizations are dynamic and embrace a major shift in the mindsets of their people. They develop dynamic competences to adjust quickly to any challenges and opportunities

“Boxes and lines” less important.

Focus on action

Top-down hierarchy Bureaucracy

Detailed instruction

Silos Leadership shows direction and enables

Team built around end-to-end accountability action

Agile organizations have the ability to create a critical source of competitive advantage in volatile and uncertain environments.

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Agile organizations display 5 key characteristics that distinguish them from the rest Five Pillars of Agile Organizations Agile organizations exhibit 5 key traits or pillars. To attain true agility, all 5 pillars should be deeply embedded in the organization’s system

Strategy North Star embodied across the organization

Structure Network of empowered teams

Process Rapid decision and learning cycles

Agile organizations set a shared purpose and vision. They are able to seize real opportunities, allocate resources flexibly and quickly, and provide clear strategic guidance

Agile companies have a flat structure, clear roles and responsibilities, hands-on governance system that empowers teams, and promote an open culture

People Dynamic people model that ignites passion

Agile companies empower their employees to foster entrepreneurial drive in them, where leadership services the people to create a cohesive community

Agile firms have evolving technology architecture and systems. They continually adopt Next generation enabling technology next-generation technology development and delivery practices

Technology

Agile companies concentrate on rapid experimentation with standardized ways of working, have easy access to information, and are performance oriented

To implement these pillars, an organization needs to create a major shift in the mindsets of its people.

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To manage consistency across their discrete value creation models, agile organizations set a shared purpose and vision—the “North Star” Strategy Pillar – Overview

Strategy North Star embodied across the organization

MINDSET SHIFT The key element of this pillar is shifting the mindsets of employees from “in an environment of scarcity, the organizations succeeds by capturing value from competitors, customers, and suppliers for its shareholders,” to the one where “the organization recognizes the abundance of opportunities and resources available to it, and succeeds by co-creating value with and for all of its stakeholders.”

DESCRIPTION The first pillar of agile organizations involves rethinking whom they create value for and how. They have a deep customer focus, and aspire to meet the needs across the entire customer lifecycle. They are dedicated to creating value for their stakeholders—i.e., employees, investors, and communities Agile organizations design distributed, flexible approaches to creating value, frequently integrating external partners directly into the value creation system.

These modular, innovative business models enable both stability and unprecedented variety and customization

CORE AGILE PRACTICES The core agile practices encompassed in the first pillar of an agile organization include: Shared Purpose and Vision

Sensing and Seizing Opportunities

Flexible Resource Allocation

Actionable Strategic Guidance

Setting a shared purpose and vision—North Star—for the organization helps people feel personally and emotionally invested.

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A shared purpose and vision or the “North Star” renders uniformity and concentration to isolated value creation models Strategy Pillar – Core Agile Practices (1/2)

Shared Purpose and Vision

Sensing and Seizing Opportunities

The shared purpose and vision North Star serves as a reference when customers choose where to buy, employees decide where to work, and partners decide where to engage. Agile companies keep stakeholder focus at the core of their North Star and at the center of their value creation

An agile organization that links an entrenched North Star with a flexible value creation approach can sense and seize opportunities more quickly.

They value:

◙ Stakeholder responses and opinion—via product reviews, crowdsourcing, and hackathons

◙ Tools—like customer journey maps—to spot opportunities to serve customers better

◙ Customer insights via formal and informal mechanisms—e.g.,

online forums, in-person events, and start-up incubators—to help outline, pretest, implement, and review new initiatives and business models.

Agile organizations closely monitor changes in customer preferences and external environment and act accordingly.

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Agile organizations keep analyzing the progression of programs and make timely decisions to continue or wrap them up Strategy Pillar – Core Agile Practices (2/2)

Agile firms assign resources flexibly and expeditiously to where they Flexible are really required, and examine the environment relentlessly. They use Resource Allocation standardized resource-allocation processes to shift resources (people, technology, and capital) rapidly from declining initiatives into flourishing businesses. These companies adopt processes that use well-defined metrics to place resources to programs for required periods, which are regularly evaluated

Actionable Strategic Guidance

The executive management of agile organizations has the role of an integrator that affords clear-cut strategic guidance to the teams on prioritize initiatives. The senior management also guarantees that the organization is focused on delivering concrete value to customers

The leadership of agile companies build the capacity of their people to work independently to achieve group outcomes.

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Agile organizations have a stable top-level hierarchy and a flexible network of teams underneath to organize and coordinate efforts Structure Pillar – Overview

STRUCTURE Network of Empowered Teams

MINDSET SHIFT This pillar leverages strategic mindset shift from “people need to be directed and managed, otherwise they won’t know what to do—and they will just look out for themselves resulting in chaos,” to “when given clear responsibility and authority, people will be highly engaged, will take care of each other, will figure out ingenious solutions, and will deliver exceptional results.”

DESCRIPTION The second pillar of agile organizations involves a stable top-level organogram, but swaps the rest of the hierarchy with a flexible network of teams to organize efforts by balancing individual freedom with shared coordination. To create agile organizations, leaders need to identify, design, create, and sustain human networks (business and social).

Agile organizations have a network of empowered teams that work with a high degree of alignment, responsibility, skill, clarity, and teamwork. These firms must provide a secure environment for the teams to operate effectively.

CORE AGILE PRACTICES The core agile practices encompassed in the second pillar of an agile organization involve: Well-defined Flat Structure

Clear-cut Accountable Roles

Hands-on Governance

Robust Communities of Practice

Active Partnerships and Ecosystem

Open Culture

Fit-for-purpose Accountable Cells

Organizations needs to provide a secure environment for the network of empowered teams to operate effectively.

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Implementing a well-defined, flat organizational structure aids in value creation Structure Pillar – Core Agile Practices (1/2)

Well-defined Flat Structure

Agile companies implement a clear, flat structure that supports value creation. Teams are typically bunched into groups that share a common mission, having a headcount sufficient enough to maintain relationships and collaborate. The teams in a group can be scaled to meet specific requirements

Clear-cut Accountable Roles

Agile firms ensure clear accountabilities and roles for the people to cooperate across the organization to accomplish work, instead of losing time and energy due to unclear or duplicated roles, or approvals. They proactively address any ambiguities in roles, and treat roles and people as separate entities

Hands-on Governance

An agile company encourages proactive governance where performance management and decision rights are pushed to the limits. Decisions are made as close to relevant teams as possible in highly-productive and coordinating forums, which relieves the leaders and let them focus on system design and provide guidance and support to empowered teams

Agile companies develop departments to serve as robust communities of Robust Communities knowledge and practice, attract and coach talent, share knowhow and experience, and provide stability and continuity even if employees of Practice shuffle between different operating teams

Advancing departments as healthy groups of knowledge and practice and professional “homes� for people assists in business continuity.

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In Agile companies, employees work with stakeholders and partners in existing and complementary industries to develop new offerings

Structure Pillar – Core Agile Practices (2/2)

Active Partnerships and Ecosystem

Agile firms foster active partnerships and an environment to strengthen internal networks (e.g., customers and vendors) and form deep linkages with external networks (e.g., academics, government entities, and industry) to access the best talent and beliefs, generate insights, and co-create new products and solutions

Open Culture

Agile organizations design and build open environments to empower people to do their jobs efficiently. These environments promote clarity, exchange of ideas, cooperation, and teamwork across the organization

Fit-for-purpose Accountable Cells

The primary building blocks of agile organizations are fit-for-purpose performance cells. In comparison with machine model, the performance cells offer greater autonomy, accountability, versatility, are rapidly deployed, and are more focused on value-creation and performance outcomes. They constitute teams working on a shared task or networks of individuals working separately, but in an organized way

Cross-functional and self-managing teams are some examples of agile performance cells.

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Recurrent rapid iteration of thinking, executing, and learning shapes the organization’s ability to innovate and function in an agile way Process Pillar – Overview

PROCESS Rapid Decision and Learning Cycles

MINDSET SHIFT This pillar leverages strategic mindset shift from “delivering the right outcome, the most senior and experienced individuals must define where the company is heading, the detailed plans needed to get there, and how to minimize risk along the way,” to “we live in a constantly evolving environment and cannot know exactly what the future holds.

The best way to minimize risk and succeed is to embrace uncertainty and be the quickest and most productive in trying new things.”

DESCRIPTION The third pillar of agile organizations involves working in rapid cycles of thinking and adopting a process of creativity and accomplishment. This rapid-cycle way of working affects every level. At the team level, agile organizations radically rethink the working model. At the enterprise level, the rapid-cycle model accelerates strategic thinking and execution—e.g., moving to quarterly cycles, dynamic management systems like Objectives and Key Results (OKRs), and rolling 12-month budgets.

CORE AGILE PRACTICES The core agile practices encompassed in the third pillar of an agile organization involve: Rapid Iteration and Experimentation

Standardized Ways of Working

Performance Orientation

Information Transparency

Continuous Learning

Action-oriented Decision Making

Rapid Decision and Learning Cycles leverage significant positive impacts to the organization.

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Rapid iteration saves time, reduces rework, creates creative solutions, and instills a sense of accountability and achievement within the team Process Pillar – Core Agile Practices (1/2) By focusing on rapid iteration and experimentation, teams in agile firms produce the primary deliverable (minimal viable product) often within 1 to 2 week “sprints.” The teams hold daily meetings to share progress Rapid Iteration and solve problems. Between sprints, teams meet to review, plan, share & Experimentation progress, and set goal for next sprint. Teams are accountable for end-to-end results, and are empowered to gather stakeholders input directly to ensure the product meets the customers’ needs

Standardized Ways of Working

Agile companies embrace harmonized ways of working to enable interaction between teams. They use common language, processes, formats, social networking, technologies, and dedicate time for teams to work together each week in the sprint. This approach enables rapid iteration, input, and creativity

Performance Orientation

Agile organizations strongly focus on performance, explore new performance management approaches based on shared goals, and evaluate business impact. These processes are informed by frequent formal and informal feedback and open discussions of performance against the target

Agile organizations employ innovative performance management approaches and appreciate formal and informal feedback and open performance dialogue.

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Agile organizations believe in transparency of information, where every team can easily access and share the required information Process Pillar – Core Agile Practices (2/2)

Information Transparency

Employees in agile firms can easily work with peers that have relevant knowledge or similar interests, openly sharing ideas and results of their work. Team members are transparent with one another. Everyone can raise their voice to point out and discuss any issues

Continuous Learning

An agile organization holds continuous learning as an integral part of its DNA. Everyone in the company learn from theirs and others’ successes and failures, and improve their knowledge and skills. Such an environment promotes ongoing learning and fine-tuning, which helps develop deliverables quickly. People seek ways to improve their processes, methodologies and ultimately the performance

Action-oriented Decision Making

They have a fair understanding of potential decisions to be made and clearly outline the decision-making authorities. They make frequent small decisions, promptly try their applicability in action, and tweak them if necessary. These firms do not pursue consensus decisions; all team members provide input, the views of team members with the most relevant expertise are assigned greater weightage, and other members, including leaders, “disagree or commit” and move on

Agile organizations underscore the importance of prompt and persistent decision-making.

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Agile organizations have a people focus and they do everything they can to strengthen their capabilities People Pillar – Overview

PEOPLE Dynamic People Model to Ignite Passion

MINDSET SHIFT This pillar leverages strategic mindset shift from “to achieve desired outcomes, leaders need to control and direct work by constantly specifying tasks and steering the work of employees,” to “effective leaders empower employees to take full ownership, confident they will drive the organization toward fulfilling its purpose and vision.”

DESCRIPTION

CORE AGILE PRACTICES

An agile organizational culture puts people at its core by engaging and empowering them to create value jointly, effectively, and timely. Leadership in an agile company empowers and builds capacity of its people to create strong processes, culture, and community, and promotes entrepreneurship and skill building needed to become agile.

The core agile practices encompassed in the fourth pillar of an agile organization involve: Cohesive Community

Shared and Servant Leadership

Entrepreneurial Drive

Role Mobility

Agile organizations invest in their leadership to empower and develop employees.

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Entrepreneurial drive is a key feature of agile companies, where employees take ownership of team goals, decisions, and performance People Pillar – Core Agile Practices

Cohesive Community

Agile organizations create an integrated community and a common culture. Cultural values are strengthened through positive behavior from the colleagues and influence in an atmosphere of mutual trust, rather than through rules, processes, or hierarchy

Leadership in agile organizations serves the people in the organization by empowering and developing them. This “shared and servant Shared and leadership” entails leaders who are thinkers, planners, and trainers that Servant Leadership empower people with most relevant skills to lead, cooperate, and deliver concrete results. These leaders are catalysts who inspire people to act as a team and involve them in strategic decision-making

Entrepreneurial Drive

Role Mobility

People-focused processes support in building a positive culture—i.e., clear accountabilities along with the autonomy to pursue future opportunities. People spot and pursue prospects to develop new initiatives, knowledge, and skills proactively. Agile organizations draw people motivated by genuine desire for work, and who constantly aspire for excellence Agile organizations constantly shift employees—both horizontally and vertically—between roles and teams, based on their personal development goals. An open talent marketplace supports this by providing information on available roles, tasks, projects, interests, capabilities, and development goals

Talent development in agile organizations is about building new capabilities through a variety of experiences.

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Innovative technology enablement renders agile firms an edge in rapidly meeting their clients’ requirements Technology Pillar – Overview

TECHNOLOGY

Next Generation Enabling Technology

MINDSET SHIFT This pillar leverages strategic mindset shift from “technology is a supporting capability that delivers specific services, platforms, or tools across the organization as defined by priorities, resourcing, and budget” to “technology is flawlessly integrated and core to every aspect of the organization as a means to unlock value and enable quick reactions to business and stakeholder needs.”

DESCRIPTION For agile-aspiring organizations, a fundamental technology focus of the organizational model necessitates reconsidering the technologies triggering and supporting their products and processes, as well as adopting modern technology practices to support agility and flexibility.

CORE AGILE PRACTICES The core agile practices encompassed in the fifth pillar of an agile organization include:

Evolving technology architecture, systems, and tools

Next-generation technology development and delivery practices

Adopting next-generation technology development and delivery practices helps shorten the solution delivery times.

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Agile organizations progressively incorporate new technical innovations Technology Pillar – Core Agile Practices Agile organizations offer solutions and services that meet evolving customer and competitive landscapes. They try to digitize or digitally-enable traditional products and services, persistently and timely evolve operating processes. But to do all this, they need Evolving Technology evolving technology architecture, systems, and tools.

Architecture, Systems, Agile organizations utilize new, real-time communication and and Tools

work-management tools, implement a modular software architecture to enable teams to effectively use technologies that other units have developed. This approach reduces handovers and interdependencies that can slow down production cycles.

Agile organizations incorporate a range of innovative technology development and delivery practices (e.g., handover-free DevOps) into their business to design, build, implement, and support new Next-generation technologies. Hackathons, crowd sourcing, and virtual collaboration Technology spaces are the mainstay of such firms to appreciate customer needs and Development and offer relevant solutions rapidly. Widespread utilization of automated Delivery Practices testing and deployment leverages lean, flawless, uninterrupted, and timely software releases to the market (e.g., within two weeks vs. every six months). The IT function is closely knitted together where different disciplines work in unison and collaborate closely to deliver seamless solutions.

Agile firms create cross-functional teams of business and technology people to develop, test, deploy, and maintain new products and processes.

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