Agile organizational structure – a framework for context-specific design

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Against the background of the increasing dynamics of change resulting from digital transformation, agility receives a high degree of attention. Agility is thereby understood as the ability to respond to changes effectively and efficiently (Häusling und Fischer 2016, p. 30; Zobel 2005, p. 160). However, depending on the discipline, a slightly different focus is chosen. This summer I have therefore tried to show in a blog post which fields of design can be differentiated in terms of agility (cf. Figure 1).

Figure 1: Design fields of agility (Krapf 2017, p. 33)

 

Structure & Governance: The difficulty of translation into one’s own context

There is an increasing number of (practical) literature with suggestions for implementation in a variety of areas of agility. This also applies to Structure & Governance, where the spectrum of ideas is very broad. For example, there are very concrete, even apodictic guidelines such as the Robertson Holacracy Approach (2016), while other popular models such as the Laloux Teal Organization (2014) are probably closer to an abstract philosophy than a blueprint. In short, there are many theories on agile structures and some practical examples, but the translation into one’s own organisational practice still seems to be a huge challenge, which some practitioners and consultants are threatening to freeze.

Agile Organizing Kit as a useful orientation model in the design field of Structure & Governance

This week I have now come across the ManagementKits orientation model, which can support the translation of various theories. Prof. Dr. Olaf Bach, the author of the model, has used his Agile Organizing Kit for the field of Structure & Governance to provide helpful questions and design advice on five aspects:

1) Purpose: „How do we create value and what is our purpose?“

For Olaf Bach, Purpose is at the beginning of all considerations, just as it is a central theme in Laloux (2014). The setting of a „Purpose“ is central to agile organizations because it strengthens the identification of employees with the organization, promotes the assumption of (self-)responsibility and gives guidance to the (team) goals. In addition, a Purpose serves as a reference for communication and decision-making in organisations and thus provides a framework for the behaviour of the organisation’s members.

2) Platform: „What is the joint platform / frame governing or supporting agile or self-organizing?“

According to Olaf Bach, the next step is to find a common platform that functions as a central lever for integration. He cites some well-known examples such as the Constitution of Holacracy (Robertson 2016); the horizontal link between teams at McChrystal (2015); Squads, Chapters and Tribes at ING or Spotify, or the Collegue Letter of Understanding at Morning Star (Hamel 2017). The aim of this platform should be to form a structure with a division of labour that manages with minimum or no hierarchy.

3) Units: „How is decentralized management work conducted in an agile and self-organized way?“

Olaf Bach points out that „management“ is still necessary due to the decentralisation of decision-making powers. Hamel (2017) already shows this in the case study of Morning Star, where losing „managers“ meant that „all“ employees had to take on management tasks. In this design aspect, the question of how these tasks are transferred to teams or other individuals must therefore be clarified. Among other things, it deals with issues such as tracking the achievement of objectives, allocating resources, setting strategic priorities or giving feedback on a regular basis.

4) People: „How do individuals experience, learn, and lead in agile set-ups?“

In this aspect, Bach focuses on learning the new role: The role change for (previously) „formal“ managers as well as for the other team members. The former have to tackle the challenge of overcoming behaviours typical of hierarchies, such as corporate policy decision-making or power-oriented leadership. It is not easy for all former managers to give up their accustomed status or claim to leadership and find a sense of meaning in a new role as peer. In turn, employees have to discard any patterns of submission and (re)learn to take responsibility. This also means building up (management) competencies such as making decisions, dealing with ambiguity or giving feedback.

5) Process: „How does the agile transformation journey look like?“

In the final part, Bach discusses how the transformation from a classical to an agile organizational structure can be achieved. As an orientation, he lays out a classical project plan with: a) Preparation in the sense of „need for action“; b) Initiation; c) Design;
d) Implementation and incremental optimization through learning. Exciting are here above all the questions Bach raises about the phases. For example, the need to decide whether the entire organization should be transformed at once or, for the first time, just one department as a pilot. Whether an existing model (such as Holacracy) is to be used, an organization-specific solution is to be copied (such as ING or Spotify) or an own structure is to be designed.

Conclusion: A valuable reference model for your own solutions

The framework designed by Olaf Bach is not an Ikea guide to building an agile structure. But can be seen as a box of Lego building blocks, as Bach himself formulated beautifully, which support the design of such an organizational structure. From my point of view, the „Agile Organizing Kit“ has succeeded well, because the „Structure & Governance“ design field provides an orientation for finding the agile structure that seems to be viable for a specific context.

 

Bibliography

Hamel, G. (2017). First, Let’s Fire All the Managers, Harvard Business Review. http://​loomio-attachments.s3.amazonaws.com​/​uploads/​7295de12aa63f3eb64756780496ca5be/​First,%20Let’s%20Fire%20All%20the%20Managers%20-%20Harvard%20Business%20Review.pdf.

Häusling, A. & Fischer, S. (2016). Mythos Agilität – oder Realität? Personalmagazin (04), 30–33.

Krapf, J. (2017). Agilität als Antwort auf die Digitale Transformation. Synergie – Fachmagazin für Digitalisierung in der Lehre (3), 32–33.

Laloux, F. (2014). Reinventing organizations. Brussels: Nelson Parker.

McChrystal, S. (2015). Team of Teams. New Rules of Engagement for a Complex World. London: Penguin UK.

Robertson, B. J. (2016). Holacracy. The revolutionary management system that abolishes hierarchy (Penguin business).

Zobel, A. (2005). Agilität im dynamischen Wettbewerb. Wiesbaden: Deutscher Universitätsverlag.

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