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Agile transformation requires organisational redesign

Monday, December 5, 2016

To get the full benefits of Agile you need multifunctional teams and to be organised around products. These require fundamental organisation redesign. Companies who choose to ignore or water down this fact will always struggle to realise the full benefits of Agile.

Whilst a multitude of factors tie into realising your Agile benefits, product and multifunctional teams are the ingredients which companies often try to avoid because of the impacts on the organisation design. Organisation redesign is not cheap, is typically disruptive, and can be seen as simply moving the deck chairs to mask underlying issues. There needs to be real confidence that the redesign will deliver benefits. Unless there is high confidence in Agile transformation being able to deliver real benefits the eagerness to redesign the organisation for Agile will always be muted.

Many organisations utilising Agile today are still ‘dipping their toes into the water’, looking to build their confidence before tackling the big asks of moving to product lines or asking their people to be much more fluid in the duties they perform. It’s a chicken and egg issue – you need the confidence first before making the big leaps, but you need the big leaps to get the benefits which give you the true confidence. One approach to getting the confidence is to identify a single value stream for an Agile pilot, committing to re-organise part of the organisation temporarily or even permanently for the pilot.

A value stream based Agile pilot allows a company to focus its efforts on getting Agile working in one area first, and to see the importance of organisational redesign in getting the benefits. Indeed, value stream pilots will always struggle where no attempt has been made to put some of organisational realignment in first, which inevitably then gets highlighted by the pilot as one of the key challenges. For example, at one financial services institution we saw major challenges in getting team members to operate outside of their main capability area – people remained aligned to capability teams and those teams’ siloed objectives. This caused issues ranging performance reviews penalising cross functional working through to capability team leads escalating ‘concerns’ with ‘unskilled people’ working on activities in their domains e.g. Architect directly collating requirements when this ‘was a BA job’. Only when people’s teams realigned around products and the capabilities became expert communities did we see these challenges diminish.

What is encouraging is that as Agile is becoming very mainstream and hence the built-in confidence and acceptance of Agile is growing. Enfuse Group are seeing more and more examples of organisations willing to take the big plunge and redesign their organisation for Agile success(and not just within IT, but with the wider business as well). We rarely recommend organisations go full throttle into an Agile transformation, but we do recommend that companies acknowledge and plan for the big changes this is going to mean for their organisation design.