Building an Agile Networked Organisation (ANO)

So it's clear Networks work better than top-down domination Hierarchies. If you had a chance to design a multi-thousand-employee, multi-billion euro business today in the 21st century, you'd do it as a networked organisation.

Taking inspiration from Steve Denning's Forbes article illustrating the US Army and Amazon, two relatively large, relatively successful organisations, I'm protocolling these lessons for myself, my team and anyone else seeking structure on this topic. Though Denning didn't call it so, I'm labeling this type of an organisation ANO (coincidently means "yes" in Japanese).

Structures

Classical corporate structures are like buildings: they are stuck in the same place. A structure has the value of stability. But it is the antithesis of agility. "Agile structures" is an oxymoron – they are fluid, dynamic networks.

• Departments may be administrative homes for employees – but only for administration purposes.
• Priorities are defined organisation-wide, not in individual business-units.
• The network model rests on the assumption that expertise exists throughout the organisation, that often others know more and better than the top, and that ideas can come from anywhere.

Lessons from Gen. Stan McChrystal's (US Army) Missions in Afghanistan and Iraq

Leadership

• Role of the organisation builder, the core leader, is that of a gardener rather than a chess player. His job is to ensure the ground is sufficiently fertilised, the garden protected from pests, a harmonious balance of plants is maintained and the final outcome is clear.

Daily Business

• It is not just about symbolic egalitarianism. The cultivated chaos of the open space encourages interaction between employees distant from one another on the org chart.
• The daily give-and-take among people at all levels in the hierarchy is an embodiment of the fluid communication and collaboration that are needed for success.
• Daily briefings are a constant affirmation that there was no established script. All actions are aimed at customer satisfaction.
• Leaders engage with others at the level of need and choice.
• There is no telling in advance what would be decided. Leaders do not have an outcome that is imposed on them. They are open to possibility and surprise.
• The leaders have to avoid pressing for a pre-determined conclusion. They have to be willing to allow for alternative outcomes, whatever the cost to their own egos or the pride of their own units. Leaders have to accept that the best answer might come from anywhere in the network.

8 Conditions for Successful ANO

1. Goal clarity – ensure everybody is following one single goal. Formulate it in simple terms. Define it around the customer.
2. Direction – the leadership should make it clear how the goal will be accomplished. As Jimmy Carter said – the leader knows the way, shows the way and goes the way.
3. Metrics – The organisation should have ways of measuring the impact of the initiatives being pursued by the different teams, to the overall goal. Metrics should be established _before execution starts.
4. Discipline – Where things aren’t contributing to the goal as expected, they need to be stopped or amended, sooner rather than later. If the idea is a good one, but the wrong team is pursuing it, or pursuing it in the wrong way, then it can be relaunched with a new format or with a new team.
5. One Organisation – The team reports to the organisation, not to any particular unit or manager. The Organisation is proxy to customer-value.
6. Self Organising Teams – Agile units have the maturity and experience to self organise themselves around final Outcomes. They seek reasonable (based on Outcomes to be achieved) time & resources from the Organisation.
7. Formal Interfaces between Teams – Teams communicate via pre-agreed metrics, and communication protocols. Personal relationships play a role, but only in as much as they add synergic value to customer.
8. Rapid and Relentless Learning – Leaders have to unlearn and relearn rapidly, constantly and relentlessly. Learnings are aimed to equip with skills to navigate the ANO to the next goal/milestone/target. Leaders must choose the lessons they pursue wisely.

3 Agile Principles/Laws

Law of the Small Team

Work should in principle be done in small autonomous cross-functional teams executing in short cycles on relatively small tasks and getting continuous feedback from the customer or end user.

Law of the Customer

Obsess with delivering value to customers.

Adjusts everything — goals, values, principles, processes, systems, practices, data structures, incentives — to generate continuous new value for customers and ruthlessly eliminate anything that doesn’t contribute.

Law of the Network

View the organisation as a fluid and transparent network of players that are collaborating towards a common goal of delighting customers.

When the whole organisation truly embraces Agile,

• the organisation is less like a giant warship, and more like a flotilla of tiny speedboats.
• Instead of a steady state machine, the organisation is an organic living network of high-performance teams.
• Managers recognise that competence resides throughout the organisation and that innovation can come from anywhere.
• The whole organisation, including the top, is obsessed with delivering more value to customers.
• Agile teams take initiative on their own, and interact with other Agile teams to solve common problems.
• In effect, the whole organisation shares a common mindset in which organisation is viewed and operated as a network of high-performance teams.

Surprise – Agile Organisations Are Hierarchical!

• The top management still has the important function of setting direction for the organisation.
• Top management bears the responsibility of defining, facilitating and monitoring the (above) 8 conditions for successful ANO.

People still get Fired

• People still get fired if they don’t get their job done.
• The drive for higher performance in an Agile organisation is even more relentless than in a bureaucracy.
• Poor performers can hide in a bureaucracy. In the Agile organisation, radical transparency enables peer-to-peer accountability.
• The performance criteria is not to satisfy a boss: it is indeed the added value to customer.

The lynch-pin of Agile is the third principle – the impact of small high-performance teams and the customer focus will be sub-optimal unless the whole organisation operates as an interactive network.

Watering, weeding, and protecting plants from rabbits and disease are essential for success. The gardener cannot actually ‘grow’ tomatoes, squash, or beans— she can only foster an environment in which the plants do so.” – Gen. Stan McChrystal