Can agility become reality?
Testing the limits of agile teamwork
People talk a lot these days about their operational agility. This makes a lot of sense – in an uncertain and volatile world, small, flexible groups seem like the way to go. Organizations that are 1) self-managed 2) mostly horizontal (often without a clear leader but with decision-making power on all levels), and 3) customer-focused are like amoebas – fast-evolving and hard to kill.
I used to wonder why midsized or larger firms often have a hard time adopting this kind of structure, but after carrying out projects for local tech companies and talking with friends at start-ups or smaller firms, helping companies with their tangible digitalization challenges, I drew a few conclusions.
In my experience, only companies that satisfy three conditions can make this transition:
Most of the people in the organization are professionally driven and have an entrepreneurial mindset. Ideally, the employees must be experienced and have a strong feeling of purpose in their work (e.g. taking care of elderly, developing oneself by working in cutting-edge projects). The reason is that the people in the organization need to be capable of making correct decisions independently and feel a high degree of ownership in the company, both of which are essential to ensure they don’t misuse their power. (If either quality is lacking, a little “skin in the game” – a financial incentive or an ownership stake – can help ensure employee alignment.)
The company needs to have a coherent culture. The employees need to share a common work ethic and expectations about service or product quality. They need to “speak the same language” across units, in order to minimize internal friction and miscommunication. Most importantly, they need to be obsessed with the customer and feel free to experiment and make decisions to serve the customer better. If mistakes are penalized, the culture will become hierarchical and lack the ability to make rapid iterations.
Production teams must have the ability to operate independently. Work units should be designed so that there aren’t too many dependencies between them. This is essential for enabling changes in operations without compromising the productivity of surrounding teams. Amazon handles this by organizing teams around capabilities and services as opposed to projects. Buurtzorg, a Dutch health services company, handles this by dividing its operations into hundreds of individual cells (=teams of nurses) who are responsible for their own customers. Moreover, this kind of team autonomy increases their sense of ownership. If ‘cell-based’ organization isn’t possible due to a complex context, some companies use alignment sessions to try to keep the lines of responsibility clear. One example comes from the SAFe (‘Scaled Agile Framework’) methodology, in which ‘Program Increment Planning’ sessions help teams align their work towards the same goal. However, such practices often feel more like a clunky compromise than an actual solution.
Companies that can’t meet these three conditions can still strive to be less hierarchical and more adaptable, but their nature will not permit complete transformation to a flat and omni-entrepreneurial organization. In the end, for all the talk of “teaching the elephant to dance,” companies should consider their context and goals before they decide on a structure. In nature, form follows function. In business, it probably should as well. The agility realized by smaller companies is a great goal to aspire to, but may not be an amoeba for all seasons.