Designing Agile Organisations Part 2: Basic Principles and Recommendations

Basic principles and recommendations for designing agile organisations

Built-to-change organisations must be in close touch with market and other environmental demands to continually define and redefine a series of short-term competitive advantages. To achieve that, all employees — not just senior managers — must observe and report on market trends and identify competitive opportunities. They need to think constantly about potential alternative futures, creating a variety of short- and long-term scenarios. Instead of scheduling static annual reviews of the environment, built-to-change companies must adopt flexible and reconfigurable organizational structures.

The key design principle here is to maximize the “surface area” of the organisation by connecting as many employees as possible with the external environment. Structures that accomplish this increase the external focus of its members; bring in critical information about trends, opportunities and issues; and prevent people from becoming ossified in their roles. Thus, as many employees as possible should have contact with regulators, suppliers, the local community, watchdog groups and, most importantly, customers.

How do you do it? 

Creating built-to-change or agile structures is not a quick fix. It requires a mindful and collaborative approach to organisational redesign. Below a few basic principles and recommendations are discussed:

1. Review the Structure with the following in mind:

Critically examine the current organisational structure and it associated flexibility, accountability, roles and responsibilities and authorities. This should form that basis of for a lean, agile, forward-focused organisational design that provides a foundation for and supports a cutting edge, competitive and customer-centric business model.

Consider the following critically:

• The organismal Strategic Intent, Values and Company Culture.  Your structure should be informed by this and aligned to your values and Intent.
• Identify and protecting what works – the current magic in your organization.
• Ways of working that are cross functionally collaborative, team based and agile. 

2. Use the Matrix of Working Relationships (levels of work) to reveal the current state and to identify:

• Compressed levels – positions reporting to each other whilst doing work of same complexity
• Missing levels – interdependencies of levels, missing positions, specific complexities of work or functions “just missing”, managers getting so involved in detail that they don’t have time to manage, stress, short term focus, crisis management, reactive environment
• Duplication of functions and overlap in responsibilities
• Gaps in accountability and authority leading to grey areas that no one is responsible for, lack of clarity of role and responsibility
• Extra layers – unnecessary positions, layered delegation of authority, micro-managing, bypassing authority, extended channels of communication
• Positions that do not contribute positively to flow of work or decision-making
• Vertical and horizontal equity or inequity (especially cross functionally)
• Built in organisational constraints, e.g. approval / authorisation levels are too high (bureaucracy), application of judgment not being allowed at lower levels, etc.
• Actual vs perceived complexities and levels of work in each area.