Research collection (Agile organization)
1. North Star embodied across the organization
Mind-set shift
From: “In an environment of scarcity, we succeed by capturing value from competitors, customers, and suppliers for our shareholders.”
To: “Recognizing the abundance of opportunities and resources available to us, we succeed by co-creating value with and for all of our stakeholders.”
They seek stakeholder feedback and input in a range of ways (for example, product reviews, crowd sourcing, and hackathons). They use tools like customer journey maps to identify new opportunities to serve customers better, and gather customer insights through both formal and informal mechanisms (for example, online forums, in-person events, and start-up incubators) that help shape, pilot, launch, and iterate on new initiatives and business models.
2. Network of empowered teams
Mind-set shift
From: “People need to be directed and managed, otherwise they won’t know what to do—and they’ll just look out for themselves. There will be 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.”
An agile organization comprises a dense network of empowered teams that operate with high standards of alignment, accountability, expertise, transparency, and collaboration.
3. Rapid decision and learning cycles
Mind-set shift
From: “To deliver the right outcome, the most senior and experienced individuals must define where we’re going, 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.”
- Agile organizations focus on rapid iteration and experimentation. To accomplish this, team members must be accountable for the end-to-end outcome of their work. They are empowered to seek direct stakeholder input to ensure the product serves all the needs of a group of customers and to manage all the steps in an operational process.
- Agile organizations leverage standardized ways of working to facilitate interaction and communication between teams, including the use of common language, processes, meeting formats, social-networking or digital technologies, and dedicated, in-person time, where teams work together for all or part of each week in the sprint.
- Agile organizations are performance-oriented by nature. They explore new performance- and consequence-management approaches based on shared goals across the end-to-end work of a specific process or service, and measure business impact rather than activity. These processes are informed by performance dialogues comprised of very frequent formal and informal feedback and open discussions of performance against the target.
- Working in rapid cycles requires that agile organizations insist on full transparency of information, so that every team can quickly and easily access the information they need and share information with others. For example, people across the unit can access unfiltered data on its products, customers, and finances. People can easily find and collaborate with others in the organization that have relevant knowledge or similar interests, openly sharing ideas and the results of their work. This also requires team members to be open and transparent with one another; only then can the organization create an environment of psychological safety where all issues can be raised and discussed and where everyone has a voice.
- Agile organizations seek to make continuous learning an ongoing, constant part of their DNA. Everyone can freely learn from their own and others’ successes and failures, and build on the new knowledge and capabilities they develop in their roles.
- Agile organizations emphasize quick, efficient, and continuous decision making, preferring 70 percent probability now versus 100 percent certainty later. They have insight into the types of decisions they are making and who should be involved in those decisions.9 Rather than big bets that are few and far between, they continuously make small decisions as part of rapid cycles, quickly test these in practice, and adjust them as needed for the next iteration. This also means agile organizations do not seek consensus decisions; all team members provide input (in advance if they will be absent), the perspectives of team members with the deepest topical expertise are given greater weight, and other team members, including leaders, learn to “disagree and commit” to enable the team to move forward.
4. Dynamic people model that ignites passion
Mind-set 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.”
Leadership in agile organizations serves the people in the organization, empowering and developing them. Rather than planners, directors, and controllers, they become visionaries, architects, and coaches that empower the people with the most relevant competencies so these can lead, collaborate, and deliver exceptional results. Such leaders are catalysts that motivate people to act in team-oriented ways, and to become involved in making the strategic and organizational decisions that will affect them and their work. We call this shared and servant leadership.
People processes help sustain the culture, including clear accountability paired with the autonomy and freedom to pursue opportunities, and the ongoing chance to have new experiences. Employees in agile organizations exhibit entrepreneurial drive, taking ownership of team goals, decisions, and performance.
5. Next-generation enabling technology
Mind-set shift
From: “Technology is a supporting capability that delivers specific services, platforms, or tools to the rest of the organization as defined by priorities, resourcing, and budget.”
To: “Technology is seamlessly integrated and core to every aspect of the organization as a means to unlock value and enable quick reactions to business and stakeholder needs.”
They use hackathons, crowd sourcing, and virtual collaboration spaces to understand customer needs and develop possible solutions quickly. Extensive use of automated testing and deployment enables lean, seamless, and continuous software releases to the market (for example, every two weeks vs. every six months). Within IT, different disciplines work closely together (for example, IT development and operations teams collaborate on streamlined, handover-free DevOps practices).
An agile organization is a term applied to organizations which are quick in responding to changes in the marketplace or environment. The agile organization is focused on its customer's needs which call for customized rather than standardized offerings.
General traits of agile organizations
- They are made up of skillful, self-awared individuals who are also great team players
- Their leaders inspire others without losing the cohesion within the entire system
- Their organization is based on continuous learning from experiments
- They use an open communication style such as collaboration and sharing
- They focus on long-term business value
Making the transition to Agile includes five major shifts:
- Instead of a goal of making money for the organization, the goal of the organization is to delight the customer.
- Instead of those doing the work reporting as individuals to bosses, the work is done in self-organizing team: the role of management is not to check whether those doing the work have done what they were meant to do, but rather to enable those doing the work to contribute all that they can and remove any impediment that might be getting in the way.
- Instead of work being coordinated by bureaucracy with rules, plans and reports, work is coordinated by Agile methods with iterative work cycles and direct feedback from customers or their proxy.
- Instead of a preoccupation with efficiency and predictability, the predominant values are transparency and continuous improvement.
- Instead of one-way top-down commands, communications tend to be in horizontal conversations.
An Agile Organization is one that is quick in responding to changes in the marketplace or environment. The ‘agile organization’ is also known as ‘the entrepreneurial organization’ and ‘the resilient organization’ and this kind of organization focuses on the customer which calls for customized rather than standardised offerings. A highly agile organization reacts successfully to the emergence of new competitors, rapid advancements in technology and sudden shifts in overall market conditions. Agile enterprises thrive in non-hierarchical organizations without a single point of control.
Characteristics of Agile Organizations:
- They are made up of self-aware individuals whose actions affect the organization as a whole
- They adapt a catalyst style of leadership by inspiring others without losing the cohesion within the entire system
- Their organization is based on continuous learning from experiments
- They foster an open communication style facilitating collaboration and sharing
- Their governance is based upon long-term business value and adaptation
- Their members seek mastery in their respective skills
Whether an organization is Agile is not an issue of practices or method compliance, but a matter of organizational culture. Through observing Agile organizations of many sizes and domains we have found certain characteristics their different cultures show: They are founded on a systemic approach and the belief that every organization is a complex adaptive system and should be treated that way. On this foundation there are five areas in which Agile organizations show specific characteristics:
- They adapt a catalyst style of leadership
- Their organization is based on continuous learning from experiments
- They foster an open communication style
- Their governance is based upon long-term business value and adaptation
- Their members seek mastery in their respective skills
- For an organization to be Agile, not the complete enterprise has to show these characteristics, but all parts of the enterprise that work together to provide the full value- chain need to show an Agile culture to generate a competitive advantage.
This model provides both a simple and powerful guidance for the quest towards a more Agile organization.
1. From Shareholder Value to Customer Delight and Shared Purpose
A primary focus on shareholder value (profit) consistently leads to short-term thinking, sub-optimization, and low engagement. Agile Organizations clearly define their customer(s) and focus on delighting them by continually delivering value. Agile Organizations do not view profit as a goal, but as the means to continue to deliver on the organization’s purpose. Profits are the natural result of adding value and delighting customers.
2. From Predicting and Controlling to Embracing Complexity
The world has become less predictable. Reductionist management models of predicting and controlling are incompatible with complexity, which presents a fundamentally different set of conditions from the complicated challenges of the past. Agile Organizations create structures that embrace complexity to gain competitive advantages in the 21st century.
3. From Efficiency to Engagement and Adaptability
Efficiency is not the only approach to management; resilience and anti-fragility are more effective ways to confront complexity. Agile Organizations create space for teams to discover new opportunities and effectively respond to change. Additionally, Agile Organizations recognize that low engagement has a huge impact on the capability to deliver value and innovation. They focus on creating a human-centric, productive workplace by amplifying the five engagement factors: 1) a strong connection to the purpose of the work, 2) individual and team autonomy, 3) opportunity to pursue mastery, 4) strong social connections, and 5) daily small wins.
4. From Directed Groups to Autonomous Teams
High performing teams have a clearly defined membership, are cross-functional, trust each other to deliver on commitments, have autonomy within their area of focus, and have strong shared purpose. They move adaptively towards refining and executing against the overall team mission. Agile Organizations recognize that properly structured teams are their best tool to succeed in a complex environment.
5. From Rigid Hierarchies to Human Systems
Traditional organizations view themselves as machines, where humans are resources to be deployed as interchangeable cogs, leaders pull levers to create desired outcomes, and efficiency is the primary goal. Agile Organizations resemble living systems, where people self-organize around a shared purpose, making new connections in evolving structures to address emergent opportunities.
6. From Structured Communication to Radical Transparency
Agile Organizations make all information readily available to help individuals and teams make informed decisions. This level of Radical Transparency provides the clearest possible picture of the larger complex system, and enables the organization to adapt to change, maintain flexibility, and continuously improve. Agile Organizations are mindful of using this information in a non-judgmental way, so that people feel safe to share and consume it freely.
7. From Complicated Processes to Simple Rules
Agile Organizations recognize that a shared understanding of how members collaborate on work is critical to success. It is impossible to create policies and procedures to address every issue that will arise. Agile Organizations create Simple Rules that define broad parameters for decision making, problem solving, and establishing expectations.
8. From Heroic Leadership to Transformational Leadership
Complex systems can never fully be understood by even the most effective leader. Transformational leaders create an environment where everyone focuses on delighting customers, removing friction from the system, and developing their own leadership effectiveness. In an Agile Organization, every voice is engaged in addressing complexity in creative and innovative ways.
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Centralized Power & Structure [Red & Amber]
Red is about power: I am the leader – do what I say or else. Key innovations are the division of labour and authority. Examples include street gangs or tribal militias.
Amber organizations channel power through a hierarchy with formal roles and reporting lines (command & control). They establish stable processed that allow them to scale to a large size. Current examples are: military, government agencies, public school systems.
Achievement [Orange]
Orange is about a shift to focus on achievement: bigger and better. Innovation is key: how do we evolve our process? What projects do we need to improve things? With orange, we create plans and hold people accountable for results (predict & control). Since the focus is now on results, a meritocracy is formed based on who actually delivers. The organization is seen as machine to be exploited. Examples are multinational organizations and charter schools.
People [Green]
Green organizations focus on the empowerment of workers (within the hierarchy) as the key for driving success. There are explicit shared values that guide behaviour and decision-making. Green organizations have family as a guiding metaphor. They also have a clear purpose to support coherent activity. Green organizations see a bigger picture beyond profits: workers, customers and their role in the community. Examples include Southwest Airlines, Zappos, Ben & Jerry’s.
Teal organizations are decentralized into autonomous teams or groups. Power is shared and people are self-managing. Decisions are made independently – there is no centralized group telling people what to do. Decision-making independence is enhanced with visibility and advice. Trust replaces process. People’s whole selves (mind, body, heart, spirit) are welcomed. The organization evolves through an emergent process since everyone can make decisions. The metaphor for Teal is that of a living system. Examples include: Patagonia, Morning Star,
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https://agilemanifesto.org/
Individuals and interactions over processes and tools
Working software over comprehensive documentation
Customer collaboration over contract negotiation
Responding to change over following a plan
- The priority is to delight customers with valuable results: Our highest priority is to satisfy the customer through early and continuous delivery of valuable software.
- Change based on feedback is welcomed and we always challenge our assumption on what the client wants: Welcome changing requirements, even late in development. Agile processes harness change for the customer's competitive advantage.
- Deliver value for the benefit of customers and to learn of their needs: Deliver working software frequently, from a couple of weeks to a couple of months, with a preference to the shorter timescale.
- Cross functional teams work daily together: Business people and developers must work together daily throughout the project.
- Environment where people can create value and are trusted to take care of the client: Build projects around motivated individuals. Give them the environment and support they need, and trust them to get the job done.
- Face to face communication rocks: The most efficient and effective method of conveying information to and within a development team is face-to-face conversation.
- Progress is mainly measured by value we add to clients: Working software is the primary measure of progress.
- Work to create consistent pace indefinitely: Agile processes promote sustainable development. The sponsors, developers, and users should be able to maintain a constant pace indefinitely.
- Continuous attention to technical excellence and good design enhances agility.
- Simplicity--the art of maximizing the amount of work not done--is essential.
- The best architectures, requirements, and designs emerge from self-organizing teams.
- At regular intervals, the team reflects on how to become more effective, then tunes and adjusts its behavior accordingly.
- Transparency: This means presenting the facts as is. All people involved—the customer, the CEO, individual contributors—are transparent in their day-to-day dealings with others. They all trust each other, and they have the courage to keep each other abreast of good news as well as bad news. Everyone strives and collectively collaborates for the common organizational objective, and no one has any hidden agenda.
- Inspection: Inspection in this context is not an inspection by an inspector or an auditor but an inspection by every- one on the Scrum Team. The inspection can be done for the product, processes, people aspects, practices, and continuous improvements. For example, the team openly and transparently shows the product at the end of each Sprint to the customer in order to gather valuable feedback. If the customer changes the requirements during inspection, the team does not complain but rather adapts by using this as an opportunity to collaborate with the customer to clarify the requirements and test out the new hypothesis.
- Adaptation: Adaptation in this context is about continuous improvement, the ability to adapt based on the results of the inspection. Everyone in the organization must ask this question regularly: Are we better off than yesterday? For profit-based organizations, the value is represented in terms of profit. The adaptation should eventually relay back to one of the reasons for adapting Agile—for example, faster time to market, increased return on investment through value- based delivery, reduced total cost of ownership through enhanced software quality, and improved customer and employee satisfaction.
- Courage
- Focus
- Respect
- Openness
- Commitment
Within trust
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