MBA 8220:
Organizational Agility
Mike Gallivan
Lars Mathiassen
Richard Welke
© Richard Welke 2002
Agenda
The agility challenge
Sense-and-respond
Response ability
© CEPRIN (2007)
MBA 8220 #3 Organizational Agility
2
Topic one
© CEPRIN (2007)
MBA 8220 #3 Organizational Agility
3
Agility in Football
“I don’t just want to know what everybody has to do; I want to know
why. When you know why, you know more … You play faster”
Marshall Faulk, Running back, St. Louis Rams
Resources, e.g. the players, should know-how & know-why
Processes, e.g. practiced patterns of play, contribute to knowhow
Values, e.g. priorities and outcomes, contribute to know-why
The challenge of the players is to respond in-flight to opposition
moves and conditions of play. This requires swift interpretation of
now, optimal execution of practiced playing capabilities, and
capability to improvise.
The challenge of the coach is to create and maintain an
environment in which players become empowered to execute. This
requires continuous practicing of individual and collective patterns
of play combined with cultivation of individual and collective
capabilities to adapt.
© CEPRIN (2007)
MBA 8220 #3 Organizational Agility
4
…and Other Sports
“I skate to where the puck is going to be”
Wayne Gretzky
“I get the rebound before the shot is
taken”
Bill Russell
© CEPRIN (2007)
MBA 8220 #3 Organizational Agility
5
What drives agility?
“There is no singular agile organization design. Each organization must
design itself to be appropriately agile in response to a unique set of
external and internal forces”
Economic
forces
Business
forces
Organizational
forces
IT
forces
Work
forces
Globalization
Cost
Reduction
Sourcing
options
Enterprise
Architecture
Distance
Collaboration
Real-time
Infrastructure
Virtual
learning
Priority
projects
Global
diversity
Emerging
Markets
Employment
unrest
Shared
Processes
Distributed
buyers
Funding
models
Changing
Competencies
Leadership
Distributed
decision
making
Ambrose & Morello, Designing the Agile Organization, Gartner 2004
© CEPRIN (2007)
MBA 8220 #3 Organizational Agility
6
What Enables Agility?
Provide continual feedback
Build contextual orientation
Communicate meaningfully
Invest in knowledge networks
Encourage reassignment
Develop new competencies
Assemble diverse teams
Use multiple service providers
Reward collaboration
Build learning portfolios
Expand decision-making
Adopt consistent processes
© CEPRIN (2007)
Awareness
Do people know that
significant change is afoot
and the impact it will have?
Flexibility
Are people equipped to
respond to a wide variety of
business conditions?
Organization
agility
Productivity
Can people operate
effectively and efficiently as
conditions change?
MBA 8220 #3 Organizational Agility
Ambrose & Morello,
Designing the Agile
Organization, Gartner 2004
7
How to design agility?
Executives as architects
Systems design complements
process design
A system is a collection of
elements that interact to
produce an effect that
cannot be produced by any
subset of the elements
1.
2.
3.
4.
5.
Top-down
Synergy
Relationships
Environment
Event-driven
© CEPRIN (2007)
Plan-driven Event-driven
Firm forward
Customer back
Predict &
optimize
Know early &
improvise
Know-how
Know-why
Best practice
Next practice
Activity focus
Outcome focus
MBA 8220 #3 Organizational Agility
8
Topic two
© CEPRIN (2007)
MBA 8220 #3 Organizational Agility
9
Sense-and-Respond Organizations
Processes that learn.
Responsive governance.
Dynamic commitments.
Modular processes and outcomes.
Haeckel, Adaptive Enterprise Design: The Sense-and-Respond Model, Planning Review 1995
© CEPRIN (2007)
MBA 8220 #3 Organizational Agility
10
Learning
SENSE-AND-RESPOND
COMMAND-AND-CONROL
Assumption:
Unpredictable change
Goal:
Adaptive enterprise
Assumption:
Predictable change
Goal:
Efficient enterprise
Context
Mission
Purpose and Bounds
Adaptive structure
and Policy
Command
& Control
Managemen
t system
Coordination
of capabilities
Strategy
• Objective
• Plan
Commitment
management
A closed system
Structure
functional
hierarchy
© CEPRIN (2007)
External
Signals
MBA 8220 #3 Organizational Agility
Internal
Feedback
11
Command-Control vs. Sense-Respond
Mindset
Command-Control
Sense-Respond
Context
Efficient system in a semi-stable
environment
Adaptive system in an unpredictable
environment
Know-how
Embedded in processes
Embedded in people & processes
Process
Mass production
Modular customization
Performance
Efficiency and predictability
Flexibility and responsiveness
Profit
Margins on products
ROI and economies of reuse in
modularization and response
Organization
Functional and sequential activity
Networked and parallel activity
Information
Functionally managed and optimized
vertical views
Focused on information needed to
respond to requests
Market
Sustain share of market
Sustain individual customers
Execution
Strategy executed through plan
Strategy executed through adaptive
business design
© CEPRIN (2007)
MBA 8220 #3 Organizational Agility
12
Processes that Learn
•What does each of our
external customers
need?
Sense
Act
People in
Roles
Accountable
for
Outcomes
Decide
•What does each of our
internal customers
need?
Interpret
•What are the emerging
market opportunities
and needs?
•Which technological
innovations are
available?
•How is the competition
changing?
© CEPRIN (2007)
MBA 8220 #3 Organizational Agility
13
Responsive Governance
Ensure local autonomy
Facilitate overall
coordination
Provide a context for
business behavior (Knowwhy)
Share organization’s
“Reason for Being”
Share governing
principles
What will we
always do
What will be never
do
© CEPRIN (2007)
•Autonomy to respond
to external and internal
customer requests
•Shared strategy across
processes
•Explicit will do and will
never do to support
process execution
•Coordination
mechanisms across
processes
MBA 8220 #3 Organizational Agility
14
Dynamic Commitments
The organization
must know how
to effectively
execute its core
processes
The organization
must dynamically
manage who does
what when in
response to its
environment
© CEPRIN (2007)
•Processes that
respond to external and
internal customer
requests
•Processes that
improve core
capabilities
•Dynamic resource
allocation across
processes
MBA 8220 #3 Organizational Agility
15
Modular Processes and Outcomes
Products and
services must be
modular to
facilitate swift
customization
and innovation
Processes must
be adaptable to
suit different
contexts and
needs
© CEPRIN (2007)
•A component-based
architecture of core
products and services
•Customized solutions
to external and internal
customers
•Dynamic configuration
management
•A minimal set of
shared core processes
•Complementary
processes for
collaboration with key
customers
MBA 8220 #3 Organizational Agility
16
Assess business and process agility
What kind of sense-and-respond mechanisms are
in place to address environmental changes?
Do these mechanisms effectively address predictable as
well as unpredictable changes?
What kinds of governance mechanisms are in place
to ensure process performance, coordination with
partners and other processes
Capability to identify process innovation opportunities?
How are commitments managed and adjusted to
accommodate process performance and change?
To what extent are processes and outcomes
designed to allow for local adjustments and easy
reconfiguration?
© CEPRIN (2007)
MBA 8220 #3 Organizational Agility
17
Topic three
© CEPRIN (2007)
MBA 8220 #3 Organizational Agility
18
Response ability
Knowledge portfolio management (KPM) +
Collaborative Learning Facilitation (CLF)  Knowledge
Management (KM)
Change Proficiency (CP) + Reusable and reconfigurable
Structure (RRS)  Response-ability (RA)
RA + KM  Agility
Dove: Response Ability: The Language, Structure
and Culture of the Agile Enterprise, Wiley, 2001
© CEPRIN (2007)
MBA 8220 #3 Organizational Agility
19
Change proficiency
Reactive proficiency (Viability)
Measured by: elapsed time to change, cost, predictive
quality, latitude for change (scope)
Response-ability States
Opportunistic
Fragile
Agile
Maturity
Stage
General
Example: HR
Characteristics
Accidental
Stumble through
change
Repeatable Set of rules for
Common hiring
ritual to get new
skills
Defined
Rules broadened;
metrics in place
Knowledgebased recruit and
screen
Managed
Objectives clarified, Individualized
rules refined,
employee
accountability
development
program
Mastered
No longer rulebased; actions by
principles
achieving change
emerge
Innovative
Proactive proficiency
(Leadership)
© CEPRIN (2007)
Hires what’s
available; hope
they work out
MBA 8220 #3 Organizational Agility
Environment
enables selfdevelopment
20
Reusable-reconfigurable-scalable
Agility is accentuated or inhibited by the design of
key enterprise systems
Balance between rigidity (where nothing happens in
response to change) and chaos (where changes are
not discriminated)
Ten RRS principles:
Self-contained units (separable, self-sufficient)
Plug compatibility (share defined interaction)
Facilitated re-use
Flat interaction (peer-to-peer communication)
Distributed control (directed by objective, not method)
Deferred commitment (commitment late-binding)
Evolving standards (standardized inter-component interact)
Redundancy and diversity (duplication for capacity;
failsafe)
Elastic capability (component population can be incr/decr)
© CEPRIN (2007)
MBA 8220 #3 Organizational Agility
21
Collective
Individual
Collaborative learning mechanisms
© CEPRIN (2007)
Disagreement
Others can challenge concepts and
conclusions individuals take for granted
Alternatives
Others will offer alternative concepts and
conclusions to individual perceptions
Explanation
Externalizing internal thought transforms tacit
knowledge into explicit knowledge
Internalization
Participative dialog conveys concepts that
integrate with internal knowledge
Appropriation
How one’s concepts are adopted by others
puts the concepts in new perspectives
Shared load
Multiple levels of thought are explored and
integrated simultaneously
Regulation
Consistency is monitored and discussed from
multiple viewpoints
Synchronicity
People tend to help each other achieve a
mutual level of understanding
MBA 8220 #3 Organizational Agility
22