What Is an Agile Organization?
An Agile organization is a customer-centric organization that responds and adapts quickly to changes in the marketplace or environment. The agile organization focuses on satisfying its customer’s needs through the continuous delivery of valuable products.
Why Do You Need an Agile Organizational Structure?
Nowadays, most businesses operate in a VUCA world where requirements change frequently. What customers might have deemed an exciting product functionality yesterday, it can easily turn into just a satisfyer today. Furthermore, emerging startups quickly develop innovations, making it harder for traditional organizations to keep up with their pace. As a result, those organizations risk becoming obsolete and ultimately uncompetitive on the market.
Therefore, many organizations have already turned to Agile practices and applied them on the team level, usually looking to improve product development efficiency. However, ensuring long-term business survivability asks for a scaling Agile approach where the entire company adopts Agile ways of working, not only separate parts of it. The idea is to enable it to more quickly and effectively adapt to a changing environment, continuously improve, innovate at a faster rate, and thus better meet customer requirements. In reality, this is what can be defined as organizational agility.
To achieve it, there needs to be alignment between all organizational levels, faster communication, more frequent releases of value, and a way to ensure that the right thing is worked on at the right time.
What Are the 6 Key Characteristics of Agile Organizations?
1. Follow a Shared Purpose and Vision
One of the main attributes of Agile organizations is that they are customer-focused and committed to creating value for all stakeholders. The main idea is to shift focus to outcomes rather than merely output. That’s why there is a shared purpose and vision for everybody to follow, as leaders aim to constantly communicate it while letting people decide how to support it with their day-to-day activities best.
2. Evolved Transparency for Knowledge Sharing
Building an organizational structure that encourages knowledge sharing and keeping everyone in the loop requires radical transparency across the entire organization and a culture shift to a more open environment. In practice, companies achieve that by focusing on improving collaboration between teams and setting up visual charts or boards that radiate information. This helps keep everyone on the same page and increases their sense of belonging to the common purpose.
3. Focus on Customer Value Delivery
Another essential trait of Agile organizations is they recognize the fact that the best way to minimize risk is to embrace uncertainty. Instead of developing long-term and detailed plans that signal false security, companies need to make more rapid decisions by frequently releasing value to the market.
Agile organizations accomplish that by reducing batch sizes of everything, from individual work items to high-level strategic objectives, to gather fast feedback from the market. This allows them to respond to customers’ switching behaviors promptly and, thus, continuously deliver valuable products.
4. Regular Feedback Loops to Achieve Alignment
Agile organizations engage in regular learning cycles reflecting on any new information, adapt to changes, and continuously look for improvements. Moreover, they focus on seeking feedback constantly from both internal and external stakeholders to see how well they are executing on the high-level vision. This allows leaders to regularly evaluate and track the progress of strategic objectives and decide whether to accelerate them or shift direction to accommodate changing market conditions.
5. Empowered Teams and Cross-Functional Communication
Agile organizations build their structures by viewing them as an ecosystem of interdependent services where each service contributes to the final customer value delivery. There is an established connection and visibility across all of them, allowing a faster stream of communication top-down, bottom-up, or sideways. This will enable companies to visualize the flow of their solutions across all structures and thus focus on optimizing the entire value delivery stream.
Furthermore, the Agile teams responsible for each service within the company continuously aim to evolve their work processes to make them more “fit for purpose”. They are empowered to make local decisions, freely share ideas, and experiment with new things. This way, Agile organizations aim to create an engaged workforce that delivers more quality products or services to the end customers.
6. Adopt a Continuous Improvement Mindset
Startups heavily use the principles above to develop innovative products. However, even big, established businesses need to adopt them by creating alignment between all teams and seeing them as small startups that produce value for the final market offering.
The idea is not just to make sure that the teams are developing the right product or service but also that the entire company moves in the right direction. By integrating frequent “test, learn, adapt” cycles, organizations become capable of managing uncertainty, better understanding complexity, and thus continuously improve at a faster rate.
Isabel Leung and Howie Sung are the co-founders of The Agile Eagle, the premiere Scrum, and Agile training and coaching organization.
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