Having consumed the opinions and experiences of agile architects over the last years building a truly agile organisation requires the construction of just five central pillars.
Before addressing each pillar individually, we need to caveat that an agile organisation can refer to a whole organisation of a small team or department. However to maximise the benefits of working based on agile approaches, it is beneficial for organisations to embrace these practises. Daniel Friedmann from Bosch Power Tools makes the analogy that there is no point building an F1 car only to sit in a traffic jam because other functions move so slowly.
Pillar #1: Mindset
This is the central pillar behind being a truly agile organisation. The right people need to be in place to implement these new processes. An agile team and its members need to embrace change, collaboration, transparency and be comfortable in working in multi-functional teams. Additionally, they need to be adaptable and be open to change — and failure.
Indeed, if success is the long term objective of an agile organisation, then failure is the short term goal. This sounds paradoxical but only through collective failure can agile teams learn and develop better solutions. So the earlier and more frequently ideas are tested, the earlier the insights that are available and the faster the development of that winning solution.
By failing earlier in the process money is also saved. In truly agile teams short term failure is encouraged and is not considered personal to the initiator of the idea in any way. As Laura Goodrich, Co-founder of On Impact notes that, "if your workforce is emotionally agile, they can successfully cope with the turmoil and take the organization to the next level". Failing faster (or earlier) means learning earlier.
Embedding such a mindset within a business has its challenges, especially in more established companies. Not all team members, for various reasons, feel comfortable about embracing such change. Some may have had little experience of change or failure. Others, usually senior managers, climbed the ladder by being successful within the context of old, often hierarchical, organisational structures. Investing in support and coaching for such individuals is a necessity for any organisation undertaking such a transformation.
Pillar #2: Culture
Once formed the objective of agile organisations is to form a very entrepreneurial approach to business. Barabara Schandl from Mondolez even argues that the aim is to embed a start up mentality within the team and business. As a result, mantras such as "fail fast", and "progress is better than perfection" become ingrained within the culture. In a product development context agile teams identify the minimum viable product (MVP), launch into the market and then continuously improve it.
Within all truly agile organisations the consumer is at the beating heart of the organisation. Although not a physical member, an agile teams' objectives are to constantly seek out solutions and show empathy to consumers' problems. All team members forge a collaborative working culture whose core objective is developing, consumer-centric solutions. The culture is formed around the consumer and an embrace of innovation.
In all agile teams entrepreneurship is valued and many look to the working practises of startups for inspiration, particularly their attitudes towards risk and failure. Agile teams in some larger organisations work in a different building to the sterile main office in an office environment similar to those seen in startups. This helps these teams to forge an identity, focus on innovation and symbolises their "independence".
Pillar #3: Structure
All truly agile organisations are independent, small in size and cross-functional (tribes). Many agile teams within an organisation are responsible for their own P&L. All tribes consist of a small number of experts from different teams and each team is focused on customer or product segment depending on the type of organisation.
For example a tribe within a consumer goods company focused on a specific segment may consist of brand, trade marketing, sales, category management, R&D and product management experts. No one member leads the team yet these experts work collaboratively towards developing solutions relevant for their segment. All insights relating to the specific product or segment the tribe is responsible for is shared transparently within the team.
There are differences in reporting structure depending on the type of products a business is involved in. In organisations where a physical product is manufactured tribes tend to report upwards. Functional experts from different tribes (squads) often come together to discuss topics relevant to all tribes, however they have no formal reporting. In service industries where a product is derived from a standard platform the official reporting line are with the squads.
Pillar #4: Processes
The underlying objective of tribes is to react and bring consumer focused solutions to market, faster. To do this, key processes are embedded within agile organisations.
Rapid learning cycles are the first of these. Using data from agile consumer testing, product development becomes a fast, iterative process where product or marketing concepts are adapted on a daily basis. Tasks are undertaken quickly in small, bitesize steps. This keeps tribes focused on the problem (and solution) and prevents any analysis paralysis.
The second process is scenario planning. By developing and continuously reviewing multiple scenarios, agile organisations are able to adapt faster to any unexpected changes in the market. From this they can re-allocate resources more efficiently and effectively.
The development of early warning systems is another such process. Integrating such systems enables organisations to react faster to changes in the market and tap into any emerging opportunities earlier.
Pillar #5: Tools
Tools are the final pillar of a truly agile organisation but by no means the least important. Agile tools enable the full implementation of those processes listed above and, ultimately, bring their innovations to market quicker. At the heart of this are two commodities; data and the consumer.
The focus of agile teams is the understanding of consumers and solving their problems. Agile consumer insight tools are an important tool in agile teams' toolbox. The most effective agile tools are those that are the most democratic so that anyone within an empowered tribe can easily use them. Such tools must be able to automate standard businesses processes and, more importantly, be simple to use and understand. Results need to be generated quickly in bite size formats to support the iterative innovation process described above.
Take Russia’s largest retail bank, Sberbank, as an example. They undertook an agile transformation similar to what is described above. By embedding Fastuna within each tribe, product managers, many of whom had little experience with consumer insights, were able to test products and communications being developed using rapid consumer feedback loops. In addition they became more data and consumer orientated.