Agile Organization
In my last post I explained how I am trying to implement Agile in Private Equity and it is possible only if company is open to embrace agile. Mekong Capital has the foundation to adapt agile and I hope we can build an Agile Private Equity. The dominant “traditional” organization (designed primarily for stability) is a static, siloed, structural hierarchy – goals and decisions rights flow down the hierarchy, with the most powerful governance bodies at the top (i.e., the top team). It operates through linear planning and control in order to capture value for shareholders. The skeletal structure is strong, but often rigid and slow moving. In contrast, an agile organization (designed for both stability and dynamism) is a network of teams within a people-centered culture that operates in rapid learning and fast decision cycles which are enabled by technology, and that is guided by a powerful common purpose to co-create value for all stakeholders. Such an agile operating model has the ability to quickly and efficiently reconfigure strategy, structure, processes, people, and technology toward value-creating and value-protecting opportunities. An agile organization thus adds velocity and adaptability to stability, creating a critical source of competitive advantage. conditions. You can read the detail report of Mckinsey here. Another Mckinsey article “Agility: It rhymes with stability” describes the paradigm that achieves this balance and the paradox that truly agile organizations master—they are both stable and dynamic at the same time. They design stable backbone elements that evolve slowly and support dynamic capabilities that can adapt quickly to new challenges and opportunities. An agile organizations mobilize quickly, are nimble, empowered to act, and make it easy to act; following figure demonstrates it very well (thanks to Mckinsey):
During this process, I had reflection on my agile implementation in VietnamWorks and iCare Benefits. In both I started it at Engineering, the interesting result was the agile engineering in those contexts disrupted other departments as well and put them in a position to change as well. Clearly not all departments or teams started following agile but they had no choice to change and get better. I think agilefluency.org is explaining what happened to companies that I made them become agile in one picture very well:
Also I can relate to five trademarks of agile organizations of Mckinsey very well. I had to follow all the same principles; first let's look at Mckinsey trademarks of agile organizations and right after I will share my experience and what changes I noticed in my companies that I adopted agile in organization level:
Now look at this presentation that I made (copying a lot from How Google Works) back in 2014, when I was presenting in Agile conference as they've observed how agile our company was.
In this presentation I also shared about two big agile transformation that we lead in company wide which was called: Reloaded 2.0 and Phoenix. These twi change managements are like what is shown in below on Lean Startup:
Norbert Faure, Managing Director at BCG Platinion (a subsidiary of The Boston Consulting Group) said, “Putting the Agile set of beliefs into practice can be difficult in large companies, given layers of processes and structures, such as HR, finance, and legal functions.” He added that for companies to be successful with Agile working, rather than viewing the method as yet another new process, they should instead take a more holistic approach. “Agile values need to be deeply rooted into organization and culture, and be supported by a process of continuous learning, which allows for modifications when necessary, of course in an Agile manner,” Norbert stated.
Perhaps I was lucky but with great leadership support we managed to transform both companies (vietnamworks and iCare Benefits) in 18 months which is great achievements but now the challenge is how can I do the same for Mekong Capital and its investees. In last article I shared about its hurdles as well.
However some preconditions are needed as it is explained very well in HBR Article: Embrace Agile.
In my humble opinion, keys to success in agile transformation (agile organisation) are:
- It starts at top. Senior leaders should be committed, open and proactive.
- You will need agile champions who are knowledgable.
- Agile is mindset more than a methodology, so it requires culture shift and training
- Agile goes together with measuring the right things, that's why it goes well with Design Thinking, Lean Startup and OKR.
- Agile is never ending story. Agile is Kaizen, continuous learning & improvement.
Agile’s test-and-learn approach is often described as incremental and iterative, but no one should mistake incremental development processes for incremental thinking. That’s agile in practice: big ambitions and step-by-step progress. It shows the way to proceed even when, as is so often the case, the future is murky.