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Heuristics of Agile Organizational Designs

Organizational Designs have shown they are more adaptive than traditional approaches of organizing work. They support faster delivery and keep people engaged so they perform at higher levels and create better products.

To gain value from what we’ve observed in these structures, it is instructive to look at the core heuristics they demonstrate rather than the particular details of each model:

  • An end-to-end perspective with the customer in mind: Agile Organizational Designs optimize for flow. Internal handoffs and the distance between teams who develop product and the customers who receive it are minimized.

  • Self-organization toward a common purpose: Developing software is a complex endeavor, and requirements will emerge over time. As such, the people required to develop the solution will also change organically and will self-select to assume work that takes on increased organizational importance.

  • A dedication to continuous improvement and technical excellence: Software craftsmanship and a culture of engineering excellence are common in agile organizations. Because software code needs to be accessible to a broad set of people, it is important to write code in a way that is understandable for everyone and can be tested quickly and with confidence.

  • Empowering people to make and meet commitments: The executives in agile organizational structures are very much involved in defining the strategic direction of the company. They define the “what.” The team members define the “how” and make their own commitments about when the solutions can be delivered.

Although there is no one “right” Organizational Design that will magically inject agility into your organization, you can align your operational strategy and design so that it supports the realities of the business environment you’re in. This means that copying and pasting the models used at Spotify, ING, or HERE is not a helpful way to unlock agility in your organization—but understanding the reasons why these structures worked in the context of their organizations is.

If you’re operating in a business characterized by relatively high levels of stability, such as defense contracting, starting with a more traditional Organizational Design and looking for ways to inject more employee autonomy may be a rational approach to pursue. However, if you’re operating in an environment where volatility is not only common, but accelerating (as we’re seeing in most industries today), it may be wise to look to more flexible designs first and then create boundaries and well-defined interfaces where appropriate.

Organizational Design is a critical part of unlocking agility in the enterprise. By aligning both the physical workspace as well as the organizational structure so that your people can produce value faster, respond to change quicker, and do their best work, the organization as a whole will be better suited for a VUCA world.

In Chapter 5, we turn our attention to the next success factor in unlocking agility, a factor without which little work could be done at all. That factor is People.

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