This entry was written as part of the Supporting Agile Adoption program, an Agile Alliance initiative dedicated to supporting organizations and their people to become more Agile.
There are some questions in life that simply do not have good answers. “Why do we dream?”, “Are we alone in the universe?” and “Who killed Jimmy Hoffa?” Another question that falls into this category is “What does an Agile organizational structure look like?”
Yet, this was one of the questions I found myself pondering with fellow Agile friends and colleagues from the Supporting Agile Adoption workshop in Stockholm this December. (To listen to a summary of some of the topics from the workshop, listen to this episode of the Agile Coaching Network podcast.)
Organizational design is one of those things that are neither “right” nor “wrong.” It just is. The way an organization chooses to manage its work is a reflection of what it deems valuable: Organizational structures incorporate a bias for one organizational stance or the other.
Some organizations value clarity. A hierarchical structure helps delineate a chain of command and creates predictability in decision-making. Faced with a tricky situation and don’t know what to do? Just ask your manager and she will let you know what the next steps are. If she doesn’t, she’ll ask her manager, and so on. An answer will be had; direction will be given.
Of course, despite perceived benefits, there are multiple challenges with this way of organizing as well. Hierarchical structures tend to ignore the diversity of thought, can be woefully slow in making decisions when faced with ambiguous situations, and don’t lend themselves well to complex environments. This is one of the reasons Agile organizations have increasingly been looking at other, more modern alternatives to organizing work.
Spotify’s approach to organizational structure, for instance, tends to optimize for creating sustainable teams and focus on specific elements of its product. As Spotify’s Marcin Floryan explained to me, work is brought to the teams so that this group of people can work together for a significant period of time and perform better. A team may focus on elements of its Podcast offering, for instance, and be dedicated to this area for a while. When business needs change, the same team may shift focus to other elements of the product, such as users’ personalized playlists or recommendations. This structure has a natural product and people bias – no accident.
Although this way of organizing may be great for the purposes of team clarity and inter-team collaboration and camaraderie, Marcin readily concedes it also has its challenges. This organizational structure works well when teams are co-located, but is less effective when employees work in a distributed manner. As organizations grow in size, distributed teams tend to be more of the norm rather than the exception, so this is no trivial manner, even at Spotify. This structure can also cause challenges to performance as teams become stale over time. As Heidi Helfand notes in “Dynamic Reteaming” teams (and organizations) go through natural “ecocycles” where disruption might in fact be necessary and healthy – keeping teams intact for too long may be counterproductive.
As our group discussion evolved that December weekend, we agreed organizational structures are inherently imperfect in maximizing the business agility needed in a VUCA business environment. Are there other analogies that might better illustrate how Agile organizations strive to organize themselves?
Perhaps looking to nature and examining organic beings might be helpful in this context. John Buck, a consultant and co-author of Bossa Nova, pointed out that the human brain – when trying to learn something – releases the presynaptic protein neurexin to search for places to establish needed new synapses. There is no pre-set structure or pathway when this takes place – the neurexin chemical is distributed with an emergent chemical coding that specifies requirements of the new learning.
This concept is a powerful analogy: As organizations embrace change and execute with purpose, they not only coordinate their people toward a strategic intent – they also need to quickly sense, learn, and respond when business conditions change. This is analogous to what happens when the brain detects a change and reacts quickly with new adaptations.
Yet as intriguing as this analogy may be, it feels very “top-down” and hierarchical. There is a brain at the top that sends signals of what to do, the rest of the body simply responds and does not think for itself.
A more apt organic analogy, then, might be to look at a soft, eight-legged cephalopod – an octopus. This mollusc has an extremely complex nervous system. In fact, two thirds of its neurons are contained within the invertebrates’ own tentacles – so you might argue an octopus has multiple “brains.” This means that parts of the octopus’ body can make autonomous decisions without responding to top-down commands. An octopus is also famously antifragile; if an arm is removed, it immediately kicks off a regrowth process where a perfectly fine tentacle grows back – from the inner nerve bundles to its outer suckers. Talk about creative destruction!
Perhaps this means organizations, as Ericsson executive and SAA program director Hendrik Esser exclaimed during our workshop, “need to become more like octopuses!” (a sentence, I’ll admit, I never thought I’d hear in an Agile leadership workshop.)
This analogy is intellectually fascinating, but not quite as straightforward when applied in an organizational setting. In practice, how would the “brains” coordinate decision-making in an organization? As wonderfully complex as the octopus is, it is ultimately an invertebrate with a defined, static goal – get food and procreate. How does decentralized, autonomous decision-making translate in an organization that needs to deal with more complex issues?
And what about self-interest? An octopus – its entire body – has strategic intent. The self-interest of the brain is perfectly aligned with the interest of the neurons in its tentacles. None of the arms are competing to become CEO of Octopus, Inc. But what does that look like in an organization where, what is best for the organization, may not be best for a local market or department executive? What does this mean when conflicting interests need to be coordinated and somehow set into practice? As informative and thought-provoking as the octopus analogy is, it quickly breaks down when we try to translate many of the concepts in organizational contexts.
Ultimately, I came to the realization that what organizational structures are aiming to create is a shared sense of reality among its people. A way to share information, in a timely manner, at the level necessary to make decisions that create value for the organization. Speed, coordination, and collaboration matter – and the context in which you work will define what that looks like for your organization.
There is therefore no single “Agile organizational structure” we can plug‘n play into an organization and magically expect agility to come out. There is no supernatural nor organic analogy – not a rainbow-jumping unicorn or glorious kraken – that will neatly explain how an Agile organization manages its flow of work.
Rather, as I explain in “Unlocking Agility“, and as covered in Jutta Eckstein’s and John Buck’s “Bossa Nova” and further defined in leadership models like Beyond Budgeting, there are heuristics that these analogies help us highlight. Values, norms and patterns of behavior that we see consistently within organizations that embrace a more Agile way of working.
While not an exhaustive list, these are the key characteristics I observe consistently in successful Agile organizations:
- An end-to-end perspective with the customer in mind: Internal hand-offs and the distance between people and teams who develop product and the customers who receive it are minimized.
- Self-organization toward a common purpose: People, teams and organizational structures evolve organically to deliver customer value.
- A dedication to continuous improvement: Agile is not something you become; it’s something you become more of. Agile organizations learn continuously and are better tomorrow than they were yesterday.
- People feel safe and are empowered to do the right thing: Executives and leaders are dedicated to creating an environment of psychological safety; people can make autonomous decisions within boundaries.
While the workshop in Stockholm that December weekend did not provide an answer to what an Agile organizational structure looks like, it helped clarify the work necessary to get there. Business agility is not a destination; it’s a continuous effort to “embrace change and execute with purpose.” A company’s organizational design is merely one of the dimensions to consider while becoming a more Agile organization.
Oh – and I did get one of those impossible questions answered this December, after all. Martin Scorcese’s brilliant “The Irishman” vividly revealed who killed Jimmy Hoffa. But you’ll have to see it for yourself to get the answer – no spoilers!