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Synopsis

Does your company suffer from an innovation crisis? Apply agile methodologies within your organization with our Agile Organization Model presentation framework and transform your organization from a static innovation-less team to a dynamic and matrixed innovation-focused team. Also, learn how Lego Group has applied agile methods to pass decision making power to the company's development departments to solve problems as they arise.

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5 questions and answers
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Transitioning a company from a static team to a dynamic, innovation-focused team using the Agile Organization Model involves several strategies. First, it's important to foster a culture of continuous learning and improvement. This can be achieved by encouraging team members to take on new challenges and learn new skills.

Second, decision-making power should be decentralized, allowing teams to solve problems as they arise, similar to the approach used by Lego Group. This empowers teams and fosters a sense of ownership and responsibility.

Third, implement agile methodologies across the organization. This includes adopting practices such as Scrum, Kanban, or Lean, depending on the specific needs and context of the organization.

Lastly, leadership should support and champion the transition, providing the necessary resources and support for teams to successfully adopt the Agile Organization Model.

The Agile Organization Model empowers development departments in decision making by promoting a dynamic and matrixed structure. This structure allows for quick decision making and problem-solving as issues arise. It encourages teams to be self-organizing and self-managing, which means they have the autonomy to make decisions that directly impact their work. This not only speeds up the decision-making process but also increases the team's ownership and accountability for their work.

Apart from Lego Group, other companies that have successfully implemented the Agile Organization Model include Spotify, ING, and IBM. Spotify is known for its squad framework, which is a key aspect of its agile methodology. ING adopted an agile approach to become more customer-focused and improve time-to-market. IBM, on the other hand, implemented agile to enhance collaboration and efficiency.

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Slide highlights

Moving to the new agile organization structure is tough. Utilize this slide to lay out and analyze all the components that will undergo the change. Agile methods, such as Scrum Process, Kanban Methodology and the Lean Project Model will come handy.

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With this slide, draw your tribe map. In a nutshell, a tribe map reflects how teams get work done and perform, and provides an organization chart that demonstrates the capability axis and shows which shared skills are owned and controlled.

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List the dos and don'ts of the transformation process. The dos may include working on key ingredients and following the rules and don'ts may include being afraid of failure and keeping your stakeholders in the dark.

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10 questions and answers
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Yes, there are numerous case studies that demonstrate the effectiveness of the Agile Organization Model in organizational transformation. Companies like IBM, Microsoft, and Spotify have successfully implemented Agile methodologies and have seen significant improvements in productivity, customer satisfaction, and employee engagement. However, it's important to note that the success of Agile transformation depends on various factors such as the organization's culture, leadership commitment, and the ability to adapt to change.

A company that could benefit from the Agile Organization Model is Amazon. Amazon's vast and diverse operations could be streamlined with the Agile model. This model would allow Amazon to quickly adapt to changes in the market, customer preferences, and technology. It would also foster a culture of continuous improvement and innovation. The Agile model's emphasis on cross-functional teams could enhance collaboration and efficiency within Amazon, breaking down silos and fostering a more cohesive and effective organizational structure.

Common challenges in transitioning to the Agile Organization Model include resistance to change, lack of understanding of the agile principles, and difficulty in shifting from traditional hierarchical structures to a more collaborative and flexible approach. These challenges can be overcome by providing comprehensive training on agile principles and practices, fostering a culture of open communication and collaboration, and gradually implementing changes while providing support and guidance throughout the transition process.

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Overview

According to management consulting firm, McKinsey & Co, the difference between traditional and agile organizations lays in the fact that traditional organizations revolve around a static structural hierarchy when agile organizations are more of a network of teams operating in rapid learning and decision-making cycles. In other words, the agile approach looks at organizations as living organisms, while the traditional approach looks at organizations as machines.

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14 questions and answers
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The Agile Organization Model views organizations differently from traditional models in that it sees organizations as living organisms rather than machines. Traditional models revolve around a static structural hierarchy, whereas agile organizations are seen as a network of teams operating in rapid learning and decision-making cycles. This approach allows for more flexibility and adaptability in response to changes.

The Agile Organization Model differs from traditional business frameworks in several ways. Traditional business models often revolve around a static structural hierarchy, while the Agile model is more of a network of teams operating in rapid learning and decision-making cycles. This means that Agile organizations are more adaptable and can respond more quickly to changes in the business environment. In contrast, traditional models can be slower to adapt due to their hierarchical structure. Additionally, the Agile model views organizations as living organisms, while traditional models often view organizations as machines. This difference in perspective can lead to different approaches in how the organization is managed and how decisions are made.

Almost any company can benefit from the Agile Organization Model, but let's take the example of a large, traditional manufacturing company. This type of company often struggles with slow decision-making processes due to its hierarchical structure. By adopting the Agile Organization Model, it could form cross-functional teams that can make decisions quickly and independently. This would speed up the decision-making process, allow for rapid adaptation to market changes, and ultimately increase the company's competitiveness.

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"Traditional organizations place their governance bodies at their apex, and decision rights flow down the hierarchy; conversely, agile organizations instill a common purpose and use new data to give decision rights to the teams closest to the information. An agile organization can ideally combine velocity and adaptability with stability and efficiency," McKinsey writes on its website.

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Spotify, a tech company, could greatly benefit from the Agile Organization Model. Spotify already uses some agile methodologies in its software development process, but fully adopting the Agile Organization Model could further enhance its efficiency and adaptability. By instilling a common purpose and giving decision rights to the teams closest to the information, Spotify could combine velocity and adaptability with stability and efficiency. This could lead to faster decision-making, more innovative solutions, and ultimately, a more competitive product in the music streaming market.

The Agile Organization Model enhances business strategy by instilling a common purpose and using new data to give decision rights to the teams closest to the information. This allows for a combination of velocity and adaptability with stability and efficiency. It decentralizes decision-making, enabling faster responses and adaptability to changes. This model also promotes a culture of continuous learning and improvement, which can lead to innovative solutions and strategies.

The main components of the Agile Organization Model include a common purpose, decision rights given to teams closest to the information, and the ability to combine velocity and adaptability with stability and efficiency. This model is designed to be flexible and responsive, allowing for quick decision-making and adaptability to changes.

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Anatomy

Per McKinsey, the anatomy of a successful agile organization consists of five main components:

  1. Strategy, which includes shared purpose and vision; sensing and seizing opportunities; flexible resource allocation and actionable strategic guidance.
  2. Structure, which includes clear, flat structure and accountable roles; hands-on governance; robust communities of practice; active partnerships and ecosystem; open physical and virtual environment and fit-for-purpose accountable cells.
  3. Process, which includes rapid iteration and experimentation; standardized ways of working; performance orientation; information transparency; continuous learning and action-oriented decision making.
  4. Teams, which includes cohesive community; shared and servant leadership; entrepreneurial drive and role mobility.
  5. Technology, which includes evolving tech architecture, systems and tools, as well as next-generation tech development and delivery practices.
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11 questions and answers
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The Agile Organization Model can significantly contribute to a company's digital transformation initiatives in several ways. Firstly, it promotes a shared purpose and vision, which is crucial for aligning digital transformation goals across the organization. Secondly, it encourages sensing and seizing opportunities, which can help in identifying and leveraging digital trends. Thirdly, it supports flexible resource allocation and actionable strategic guidance, which can ensure efficient use of resources and effective decision-making in digital initiatives. Moreover, the model's emphasis on rapid iteration, experimentation, information transparency, and continuous learning can foster a culture of innovation and adaptability, which is key to digital transformation. Lastly, the model's focus on evolving tech architecture, systems, and tools can facilitate the adoption and integration of new digital technologies.

In the Agile Organization Model, technology plays a crucial role. It involves evolving tech architecture, systems, and tools, as well as next-generation tech development and delivery practices. This means that technology is not static but continuously evolving to meet the needs of the organization. It also implies that the organization is always on the lookout for new technologies that can improve their processes and deliver better results. Furthermore, the use of next-generation tech development and delivery practices ensures that the organization is always at the forefront of technological advancements, giving it a competitive edge.

The Agile Organization Model encourages continuous learning and action-oriented decision making through its process component. This includes rapid iteration and experimentation, standardized ways of working, performance orientation, information transparency, and of course, continuous learning and action-oriented decision making. This model promotes a culture of constant learning from both successes and failures, and encourages quick, informed decision making based on the insights gained.

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Application

In his article for Forbes, Maureen Metcalf, CEO of Metcalf & Associates, covers four elements that leaders must master on the way to creating an agile organization.

Strategist leadership mindset

According to Metcalf, decision-makers of agile organizations must think about their ventures differently and regularly update their leadership approach and behavior, not just their processes. "[Leaders] need to be willing and able to change what they do and how they do it, and they need to be intellectually versatile and reflective," Metcalf writes.

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6 questions and answers
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The Agile Organization Model is a modern approach to business organization that emphasizes flexibility, adaptability, and customer focus. It contrasts with traditional models in several ways. Traditional models often have a hierarchical structure with clear lines of authority and decision-making, while Agile organizations are more flat, with decision-making distributed across the organization. Agile organizations also emphasize continuous learning and improvement, with a focus on responding quickly to changes in the market or customer needs. Traditional models, on the other hand, may be slower to adapt and change, focusing more on stability and efficiency.

Adopting the Agile Organization Model can present several challenges. Firstly, it requires a shift in mindset from traditional hierarchical structures to a more flexible and responsive approach. This can be difficult for those accustomed to traditional methods. Secondly, it requires a commitment to continuous learning and adaptation, which can be time-consuming and require significant resources. Lastly, it may face resistance from employees who are uncomfortable with change. These challenges can be overcome by providing adequate training and support, fostering a culture of openness and flexibility, and gradually implementing changes to allow employees time to adjust.

The Agile Organization Model aligns with the concept of intellectual versatility by requiring decision-makers to be adaptable and reflective. They must be willing to change their approach and behavior, not just their processes. This intellectual versatility allows them to think about their ventures differently and update their leadership approach regularly, which is a key aspect of agility.

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Nimble culture

Company culture and underlying agreements and values should always reflect the organization. Underlying agreements could revolve around the following topics: customer-centric approach, transparency, etc.

Lean principles

Employing lean principles means constantly boosting efficiency, eliminating waste and enhancing the value delivered to customers. The agile approach also requires ongoing analysis of company practices and processes.

Agile methods

The fourth element of an agile company is the actual agile development methodology based on the Agile Manifesto.

The Agile Manifesto, written by software engineers and developers, Kent Beck, Jeff Sutherland, Martin Fowler, Ken Schwaber, states:

"We are uncovering better ways of developing software by doing it and helping others do it. Through this work we have come to value:

  • Individuals and interactions over processes and tools
  • Working software over comprehensive documentation
  • Customer collaboration over contract negotiation
  • Responding to change over following a plan

That is, while there is value in the items on the right, we value the items on the left more."

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Case studies

The lego group

At the end of 2014, a Danish toy producer Lego was suffering from poor:

  • Cross-team alignment
  • Client collaboration
  • Release planning
  • Platform development

To solve these ongoing issues, in January 2015 the company morphed its entire DS games organization into a team-of-teams, introduced a shared sprint cadence, decentralized synchronization and dependency management and big-room planning events every eight weeks. At the end, the agile experiment had a lot of positive effects, not only on DS but also on other departments that collaborate with it.

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Switching to the agile model for Lego resulted in:

  • Less duplicated work. Teams are more in tune with each other, so they waste less time on redundant work.
  • Fewer dependency problems. Teams waste less time waiting for each other. They also interact smoothly with other departments and stakeholders.
  • Managers can update priorities and resolve impediments faster because they have a better idea of what is actually going on.
  • Client trust has improved due to transparency, as customers understand the processes and intents of the teams better
  • Planning is easier and commitments are met more often
  • Planners have a better sense of overall workload and capacity.
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The Agile Organization Model enhances planning and meeting commitments by improving coordination and communication among teams. This leads to less duplicated work and fewer dependency problems, as teams are more in tune with each other and waste less time waiting for each other. Managers can update priorities and resolve impediments faster because they have a better understanding of the ongoing processes. Additionally, client trust improves due to increased transparency. Overall, the Agile model makes planning easier and commitments are met more often as planners have a better sense of overall workload and capacity.

The Agile Organization Model improves client trust and transparency in several ways. Firstly, it promotes transparency as customers understand the processes and intents of the teams better. This is because Agile methodologies encourage frequent communication and feedback, which keeps clients informed about the progress of their projects. Secondly, Agile teams are more in tune with each other, reducing the time wasted on redundant work and dependency problems. This efficiency can increase client trust as projects are more likely to be delivered on time and within budget. Lastly, Agile allows for quick updates and resolution of impediments, which can further enhance client trust as they see issues being addressed promptly.

Adopting the Agile Organization Model in a team setting has several benefits. It reduces duplicated work as teams are more in sync with each other, leading to less time wasted on redundant tasks. It also minimizes dependency issues, with teams interacting smoothly with other departments and stakeholders. Managers can update priorities and resolve impediments faster due to a better understanding of the ongoing processes. The model also enhances client trust through improved transparency. Planning becomes easier and commitments are met more frequently. Lastly, it provides planners with a better sense of overall workload and capacity.

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Agile consultants who led the experiment, Henrik Kniberg and Eik Thyrsted Brandsgård, said: "[...] This has improved the motivation of the team members. Going to work is more fun when there's less confusion and less waste. And motivated people do better work, so it's a positive cycle! Another impact we've seen is that other parts of LEGO visit the meeting, get super inspired, and start exploring how to implement some of these principles and practices in their own department. In fact, agile is spreading like a virus within the company, and the highly visible nature of the PI planning event is like a catalyst."

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