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AGILE at Scale: How to Create a Truly Flexible Organization

AGILE at Scale:  How to Create a Truly Flexible Organization

Great cover article in this month’s Harvard Business Review:  AGILE at Scale: How to Create a Truly Flexible Organization

Headlines are:

  • In today’s tumultuous markets, where established companies are furiously battling assaults from start-ups and other insurgent competitors, the prospect of a fast-moving, adaptive organization is highly appealing. But as enticing as such a vision is, turning it into a reality can be challenging. Companies often struggle to know which functions should be reorganized into multidisciplinary agile teams and which should not. And it’s not unusual to launch hundreds of new agile teams only to see them bottlenecked by slow-moving bureaucracies.
  • Companies mentioned are:
    • Spotify
    • Netflix
    • Amazon
    • USAA
    • GE
    • Bosch
    • 3M Health Information Systems
    • SAP
    • Saab Aeronautics
    • Google
    • SalesForce
    • Riot Games
    • Tesla
    • SpaceX
  • Our studies show that companies can scale up agile effectively and that doing so creates substantial benefits.  But leaders must be realistic. Not every function needs to be organized into agile teams; indeed, agile methods aren’t well suited to some activities.  Once you begin launching dozens or hundreds of agile teams, however, you can’t just leave the other parts of the business alone. If your newly agile units are constantly frustrated by bureaucratic procedures or a lack of collaboration between operations and innovation teams, sparks will fly from the organizational friction, leading to meltdowns and poor results.  Changes are necessary to ensure that the functions that don’t operate as agile teams support the ones that do.
  • When leaders haven’t themselves understood and adopted agile approaches, they may try to scale up agile the way they have attacked other change initiatives: through top-down plans and directives. The track record is better when they behave like an agile team.
  • Two Essential Tools
    • Create a Taxonomy of Teams
    • Sequence the Transition
  • No agile team should launch unless and until it is ready to begin. Ready doesn’t mean planned in detail and guaranteed to succeed. It means that the team is:
    • Focused on a major business opportunity with a lot at stake
    • Responsible for specific outcomes
    • Trusted to work autonomously—guided by clear decision rights, properly resourced, and staffed with a small group of multidisciplinary experts who are passionate about the opportunity
    • Committed to applying agile values, principles, and practices
    • Empowered to collaborate closely with customers
    • Able to create rapid prototypes and fast feedback loops
    • Supported by senior executives who will address impediments and drive adoption of the team’s work
  • A Checklist for greatest impact:
    • Master large-scale agile initiatives.
    • Building Agility Across the Business, in 4 areas
      • Values and principles
      • Operating architectures
      • Talent acquisition and motivation
      • Annual planning and budgeting cycles
        • Funding procedures evolve to resemble those of a venture capitalist. VCs typically view funding decisions as opportunities to purchase options for further discovery. The objective is not to instantly create a large-scale business but, rather, to find a critical component of the ultimate solution. This leads to a lot of apparent failures but accelerates and reduces the cost of learning. Such an approach works well in an agile enterprise, vastly improving the speed and efficiency of innovation.
  • Companies that successfully scale up agile see major changes in their business. Scaling up shifts the mix of work so that the business is doing more innovation relative to routine operations. The business is better able to read changing conditions and priorities, develop adaptive solutions, and avoid the constant crises that so frequently hit traditional hierarchies. Disruptive innovations will come to feel less disruptive and more like adaptive business as usual. The scaling up also brings agile values and principles to business operations and support functions, even if many routine activities remain. It leads to greater efficiency and productivity in some of the business’s big cost centers. It improves operating architectures and organizational models to enhance coordination between agile teams and routine operations. Changes come on line faster and are more responsive to customer needs. Finally, the business delivers measurable improvements in outcomes—not only better financial results but also greater customer loyalty and employee engagement.
  • Agile’s test-and-learn approach is often described as incremental and iterative, but no one should mistake incremental development processes for incremental thinking. SpaceX, for example, aims to use agile innovation to begin transporting people to Mars by 2024, with the goal of establishing a self-sustaining colony on the planet. How will that happen? Well, people at the company don’t really know…yet. But they have a vision that it’s possible, and they have some steps in mind. They intend to dramatically improve reliability and reduce expenses, partly by reusing rockets much like airplanes. They intend to improve propulsion systems to launch rockets that can carry at least 100 people. They plan to figure out how to refuel in space. Some of the steps include pushing current technologies as far as possible and then waiting for new partners and new technologies to emerge.
  • That’s agile in practice: big ambitions and step-by-step progress. It shows the way to proceed even when, as is so often the case, the future is murky.

About Mike Richardson

Agility-Facilitator/Mentor/Coach; Agility-Author/Speaker; Agility-Board-Member/Chairman. All-round Agility Activist in everything I do, every day, everywhere, in every way. Provocative, Profound, Practical. At Eye-Level. With Love/Hate!

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