Continuation of A Product Director’s Quest for Change and New Capabilities Part 2 of 4. (You can read part 1 here)
The first part ended with Sara asking Kim: “How do we get those capabilities?”
Read on about how Product director Sara and Agile Coach Kim create their Agile model.
Align Organization Design With Strategic Focus
Unfortunately, you cannot buy the capabilities, instead, we need to develop them over time. Developing Agile capabilities requires unlearning ineffective practices and adopting new ones. Over time, these new practices replace old habits and become ingrained in the organization’s culture. To achieve this, it’s important to create the right working environment.
A useful analogy is the process of developing a healthy lifestyle. If someone wants to be able to party all night, have energy for daily life, and look good on the beach, they might start with a daily full-body workout. However, if they continue to eat fast food and get only three hours of sleep per night, progress will be slow. Instead, they need to combine their workout with a healthy diet and regular sleep to see real improvements. Over time, these elements reinforce one another, leading to better results.
In the same way, an organization needs to align its structure, processes, people practices, and reward systems to build Agile capabilities. The example below shows your current setup; it is a poorly aligned design that makes it difficult to achieve your required capabilities.
Example of poorly aligned organization design components
Instead, a well-aligned design as shown below should be created to ensure that all components work together to reinforce the desired Agile capabilities.
Example of properly aligned organization design components
The longer and more you work in the new design, the better the result.
Consider To Evolve Your Own Framework
Implementing an Agile framework can be useful for organizations. It provides a ‘safety net’ that ensures well-defined rules, processes, and established roles. With all the critical mistakes you could make in your organizational design, Agile scaling frameworks can help minimize those risks and keep things running smoothly.
However, with so many options out there, choosing the right framework can be a difficult task. There is a whole spectrum of frameworks. One framework may have minimal rules, while another might be packed with extensive guidelines and more roles than a Broadway play. The wrong choice could result in frustration and unnecessary details that don’t align with your needs. And let’s face it, you do not want to be hindered by a framework that just doesn’t fit your product group.
But, be aware that without the support of a framework, we have to make all design decisions ourselves, and there are many to consider and many mistakes to be made. As the famous chess player Savielly Tartakower once said at the start of a game: “The mistakes are there, waiting to be made.” However, after you’ve been through all that, the end results will better meet your specific needs and more importantly your teams will feel ownership of their process because they build it themselves.
We can follow Agile organization design guidelines to avoid making unnecessary mistakes that are painful and costly. I’ll tell you about them shortly, but let’s begin by taking a step back to gain a broader perspective.
Optimize The Whole: Your Product Group
Our ultimate goal is to achieve high performance at the group level. This requires a systemic approach, based on four key principles of systems thinking that are vital to consider when making decisions about organization design.
The first principle is that the performance of a system depends on the interactions between its parts. For instance, if team members focus solely on their individual goals and neglect the team’s objectives, the team’s overall performance will suffer. Conversely, if team members work together collaboratively towards a shared goal, they will likely outperform a group of individuals who work independently. The same idea applies across teams, we want them to work collaboratively too.
In general, the behavior of each part of a system can impact the performance of the system as a whole, so it’s important to foster positive interactions between parts.
The second principle is that a system cannot be divided into separate parts. Just as a car requires all of its essential parts, such as the engine, to function properly, a product group needs all of its essential elements, including people, processes, systems, and skills, to fulfil its purpose. Removing any critical component will impede the group’s performance and reduce adaptability..
The third principle is that optimizing a system may cause one or more of its parts to be sub-optimized. Similarly, optimizing one or more parts of a system may lead to sub-optimization of the system as a whole. For example, when one team becomes overloaded with work, the other teams may not be able to help because they lack knowledge of the relevant domain. To ensure the group focuses on its most important work, other teams may need to work outside their main areas of expertise, thereby optimizing the performance of the group at the cost of their local performance.
Define The Product Group, Then Optimize The Interactions
To optimize the system, we first define the entire system. In our case, the system is the product group, including all teams, systems, and functions, and then enhance the interactions between them. Below you can see an example of how your product group might look like.
Example of Sara’s product group with all essential parts.
Next, we de-couple the product group from the rest of the organization as much as possible, allowing it to act autonomously and change direction without being slowed down by the organization. In the end, will have a semi-autonomous product group with some shared services. Below you can see a prototype Product Group setup with four loosely coupled product groups with some shared services.
Prototype of Agile Organization Structure Semi-independent Product Groups
To summarise the steps
- Step 1: Define the product group
- Step 2: Loosely couple the product group to the rest of the organization.
- Step 3: Improve the interactions of the parts within the product group.
The story continues in post 3.