by John Okoro
Head of Agile Practice
April 29, 2019
Business Agility is Agile’s third wave and refers to applying Agile to areas outside of the ‘usual’ technology and software departments. This can include Sales, Marketing, HR, R&D, Finance, Operations and Leadership. There is no set, prescriptive approach that must be followed in order to achieve business agility, rather it is establishing how to best apply Agile principles and values to unique business challenges. Orbium’s Head of Agile practice John Okoro looks at a selection of concepts that can be used to help your organisation achieve business agility:
Modern agile methods are defined by four guiding principles:
In Reinventing Organisations, Frederic Laloux looks at how organisations have evolved and identifies what he calls the ‘Shift to Teal’. He identifies several types of organisations: red, amber, orange, green and teal as an indication of the way organisations and businesses have evolved.
Red organisations were the first type of organisation, with leadership based on brute strength (think street gang). Amber organisations added structure and hierarchy, as you would see in government organisations, and organised religions. Orange organisations are like multi-nationals, investment banks, and most corporations we are familiar with today. Orange organisations introduce meritocracy, and the ‘carrot and stick’ approach to leadership, innovation, and management by objectives are also developments associated with orange organisations.
Green organisations are particularly interesting and include the likes of Southwest Airlines and Ben & Jerry’s Ice Cream. The focus is on people, culture over strategy, and delighting customers. Agile is often associated with these types of organisations. Interestingly, one of the biggest challenges for Agile adoption is often when an orange organisation tries to apply ‘green’ Agile principles without more broadly changing culture or leadership approach.
Teal organisations introduce the idea of an organisation as a ‘living organism’. Meaning that the organisation is constantly adapting and growing. The people are changing roles and utilising their strengths in different areas, sometimes as a leader, sometimes as a follower. Some ideas associated with Teal organisations include wholeness (for the people and the organisation), self-management, and purpose. This organisation type is quite new. Laloux was able to find about a dozen examples of this type of organisation, including Buurtzorg and Morningstar.
The key takeaway from Laloux theory is that organisations are evolving. Change is something that an organisation must adapt to in order to thrive. Also, using some of the features of teal, green, and orange may still be relevant depending on the type of organisation.
Lex Sisney brings us the concept of Design Centric Leadership. Organisations can be designed to run in a way where the leader does not have to frequently intervene. This is not top-down or bottom-up organisation, but rather a hybrid of these organisational approaches. The leader only intervenes if something in the system is not working as it should.
The key idea here is that there is always leadership. Sisney shows how it is actually the well-designed organisation/ system that allows leaders to play a lesser role in day-to-day operations. This does not however, mean that leaders do not exist, rather it means they are responsible for this organisational design.
Management 3.0 is another approach that offers techniques managers and leaders in Agile organisations, or organisations that are adopting Agile can use. Management 3.0 was created by Jurgen Appelo as an alternative to traditional management practices that do not work well with Agile teams. Management 3.0 uses games, tool, and practices to provide a hands-on approach to learning about Agile management. Management 3.0 principles are delight everybody, improve everything and engage people. Basically, Management 3.0 provides a human-centred approach to people management.
The Spotify Method
The Spotify Method is one of the best-known approaches to business agility. Many companies have studied Spotify and adopted their Agile method to run projects for their whole organisation.
Probably the best-known organisation using the Spotify method for business agility across their organisation is ING Netherlands. ING Netherlands re-organised their entire business into cross-functional squads and tribes. This extends across all of their business functions and financial products and is not limited to technology. Initially, ING started with a technology only Agile transformation, but later adopted the Spotify Agile method for the wider organisation. As a result, ING Netherlands Agile transformation is often used as a case study for successful business agility / organisational Agile transformation.
One of the keys to using this method well is to adapt it to your own organisation and to keep the associated Agile values and practices/behaviours. ING Netherlands uses Agile coaches to help the teams adopt the methods and Agile culture and values. At ING these are part of what is called the ‘Orange Code’; it is made up of two parts – values and behaviours.
Holocracy is another approach for Agile management and organisation. This approach uses circles and treats the organisation more like a software operating system with certain rules that govern how the different circles and groups interact. This approach has been used maybe most famously at Zappos, with some challenges encountered by the organisation. Holocracy does not focus very much on the human aspects of the organisation (like emotions, etc), rather it focuses on rules for how the circles interact.
Lean Start-up is a popular business agility approach for start-up companies. This approach uses a cycle called ‘Build-Measure-Learn’. It is most applicable for new start-up intrapreneurial or entrepreneurial ventures like FinTechs. Using the Build-Measure-Learn cycle allows these organisations to learn very quickly and ‘pivot’ when they realise that something is not working. It can help to avoid costly mistakes, by using market and customer feedback early and often. It does not suggest a structure for your business, but rather it provides a way of working. This approach has been proven by its creator Eric Ries, as well as many other organisations that have used it as a business agility approach.
When looking to business agility, it is important to consider that the overall goal is to make your organisation more adaptive, and able to survive and even thrive in the face of change. The end goal is not to apply a particular framework or approach, but rather to have a continuously ‘learning organisation’.