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Wednesday, 30 January 2013

The Agility Grid in organisations

We all work in an industry which is called Information Technology where information is the most under-rated commodity. We have structures in place which were not modelled for this industry. We have been retrofitting our operational and management models based on principles of other industries. The irony of all this not all of us are from the era that this started nor are we from other industries. A majority of us started our careers in this industry and yet we have some of the most rigid organisations and now in the last 5 – 10 years we have been trying too hard to make these structures agile and flexible.
Organisations have structures, some horizontally aligned and some vertically aligned. When organisations embark the path of using/enabling agile practices (which is the trend at the moment in IT), they tend not to reorganise themselves to enable this. A very typical observation has been that a lot of change happens from middle management to the operational teams (in IT development teams).
I think at this point it is important to reiterate that being agile is not just a following good software development practices and processes and cannot be purely achieved by fixing one business unit. It is really an outcome of collaboration of several business units in the simplest possible way, so that when they work collaboratively the outputs of each business unit enable other business units to work efficiently with agility in an iterative way. The iterative nature needs to be reflected in how they hire people, how they budget, how they specify products and also how they sell them. Purely developing a product iteratively is only the first step. Reflecting on this and modelling your business around it is the optimum path for a business which is agile
Here is my theory which i have been pondering with for a while in my head, it is in no way a pro matrix management theory, however it does seem to present hints that it may be the way to go if planned and executed with care.
The Grid
An organisation is a grid effectively, where each line has people and resources which produce forces. These forces operate (upwards/downwards) or (left/right). At all the intersections of the forces on the grid, the forces align/oppose each other to enable flow of information and change. Where forces oppose each other you will find resistance and inability to produce results , where forces support each other you will find progress and agility.
No I am not preaching matrix management but I am trying to apply forces in physics to analyse the situation and find out which organisation can adapt to agility better. I am not sure everyone will agree but the majority of organisations have decision makers along the vertical lines and enablers on the horizontal lines. This is purely based on what i have observed than anything in some ways my interpretation
In horizontal organisations, there tend to be more enablers than decision makers. This is fine so as to make progress and internal changes flow smoothly. However the ability  to react to changes i.e external forces (could say Porters 5 forces) is reduced. This is inevitable due to a reduction of or slower decision making process. So are we saying this is not going to work. No, on the contrary seems like a horizontal organisation is an easier one to model and adapt to agility. A combination of collaboration practices that balance internal forces and and how information is relayed and used make it a more viable change. Collaboration is not just about how people work with each other it is also how information is relayed and how it is consumed in the organisation. Horizontally structured organisations with good communication channels and a democratic decision making process could adapt to agility more efficiently.
So where does this leave vertical organisations, obviously based on the grid theory above there tend to be more decision makers than enablers, This is fine however progress is limited as there are less enablers, You may find that organisations which compete on market share generally fit in here, they tend not to be the innovative ones, even if they did it might be worth looking at the product life cycle of these organisations and see how short the life span of there products are. P&L’s may tell otherwise, but look into these organisations and you will find that they have a tinge of diversifying into multiple markets or industries. A relatively high ratio of  decision makers,tend to put these organisations in the mode of reacting to incidents than change of any form. This is obviously because there are lesser enablers with a reduced capacity to induce a positive change or any form of improvement. This organisation structure is the the toughest nut to crack. However this is the most common structure in the industry.
Management structures reflect this aspect more than any other form.This I believe is a consequence of modelling our management structures along the lines of the manufacturing industries, compounded by factors such as culture, control and power. This reflects itself in governance and operations. I am not going to elaborate any further but I simply feel the manufacturing line model of management from the 80’s no longer suits the 21st century organisation which is aspiring to be agile.
Move on Management 3.0 is that the answer, not entirely , there is more to an organisation than management, We haven't even skimmed other business functions such as innovation , sales, marketing , strategy etc .. These aspects need to operate differently, which comes back to validate my original conclusion that it is not enough to just change a few business units to achieve agility, you have more on your hands than you think you do..