With agile principles and values becoming more widely accepted at the team level, a natural conversation heard in the agile community today is how to move beyond that. How do we grow agile organizations and agile enterprises? What does an agile organization actually look like? Not surprisingly, the answers remain elusive. Agile teams vary greatly in makeup and practice, all the while respecting a common set of principles and values. We should expect the same for agile organizations so rather than looking for a precise definition we should observe some common characteristics.
Ricardo Semler's Seven Day Weekend paints a great example without ever using the word agile. He describes his company Semco as a democratic organization where employees at all levels are engaged in all aspects of the business. From deciding their own jobs and salaries, to deciding what work to do, to deciding to open or close plants, to actively participating in board meetings. All information is made available to all employees and they are implicitly trusted to deal with it appropriately.
This sounds like an incredible fantasy compared to most of today's corporate organizations where high structure and high ceremony rule the day and teams are engaged not so much to solve business problems but to complete predefined sets of work by prescribed dates.
Harvard Business Review describes another example (Building a Company Without Borders; April 2010 issue, reprint R1004K). The Reckitt Benckiser (RB) name is not the household name that its competitors Proctor & Gamble, Unilever, and Colgate are; but you likely buy their products and over the last decade they have handily outperformed their competitors even in the recent downturn. What is their secret? CEO Bart Becht identifies four keys for us.
First is a ruthless focus on a small set of simple, very clearly understood goals. RB focuses on 17 power brands (such as Air Wick, Calgon, Finish, Lysol, and Woolite) in fast growing categories, innovates and invests behind them, and strives to make them the leader in every market. It is not hard to determine if the work you are doing is in line with those goals. In his recent book The Superperforming CEO, Dave Guerra refers to this disciplined focus as "Staying in the Sweet Spot" and cautions against the persistent allure to move away from it. While this may produce "brief periods of euphoria... there is always the real danger of awakening to find yourself in real trouble".
Second is leveling the playing field. RB has 400 managers all around the world, yet has a single compensation and incentive program. How many organizations today explicitly or implicitly setup internal strife defining goal-based incentives for one division that can only be met if some other division fails to meet its goals? At RB any manager may receive bonuses of up to 144% based on the performance of his group; not based on outperforming some other group. Everyone is focused on contributing to the overall good of RB, not just their specific group. Dave Guerra makes this point as well with his distinction of "Make Sure All Stakeholders Win". To superperforming companies the everybody wins scenario is simply the best way to maximize corporate profits.
Third, RB is a learning organization that recognizes failure as a huge incentive. Have a new idea? Try it and if it is going to fail, then fail small and fail quickly. Decisions are made rapidly, often in the same meeting in which the question is first asked. Consensus-driven decisions rule the day, striving for 80% alignment and 100% agreement to implement. Oh, and that other 20% might also move forward with a small experiment that will succeed, or fail small and fail quickly to fuel more lively debate. The reward is that organizational learning occurs and collectively the organization knows more about themselves and how to succeed together. Guerra uses a Deming quote to express this need for "Open and Honest Communication":
The economic loss from fear is appalling. Drive out fear, so that everyone may work effectively for the company.
People simply cannot perform at their best if they are afraid to try something new or fear reprisals for making mistakes or identifying problems.
Fourth, conflict is good. Vigorous debate is good. Voicing a strong opposing opinion is good. The best decisions are made after open constructive rigorous conversation about ideas. At RB you have you have to stand for something; not having an opinion or not voicing one is a fatal blow. What takes over is an intensity to fight for better ideas; not personal or political gain. Again superperforming Guerra shares this view with his "Believing in the Unlimited Potential of People". Unleashing the potential inside of all of us will lead to many divergent conflicting thoughts and beliefs that ultimately give organizations their best chance to excel.
One thing that should be clear by now is that agile organizations do things differently. They organize work differently, they engage teams differently, they communicate differently, they create environments of trust. To do this they need a different kind of leadership; leadership that is focused, leadership that believes in people, leadership that inspires each of us to reach beyond our wildest dreams. Leaders of agile organizations are servant leaders. Leading by example, they act in the best interests of the team, provide safe environments in which teams can learn, remove impediments that prevent teams from moving forward.
Still sound like a dream? How do we get started? What do we change first? How do we become a Semco or Reckitt Benckiser? We start small, we take small steps, we recognize agile organizations are not created by design, but by evolution. Where to start is not as important as starting. Where to start is not as important as the vision we aspire to. Agile organizations are evolving organizations that know no boundaries and are on a journey to greater heights that never ends.