The term "business agility" isn’t new. To some leaders, agility is about adapting to customers. Others associate agility with rapidity, and some define it as becoming resilient to change. In 2018, Ernst & Young (EY) released a report on agility in which 27% of CEOs rated rapid decision making as the top factor to enhance agility.
This result is spot on, but agility has a broader definition. To me, it is defined as an organization’s overall ability to thrive in an ambiguous environment and continuously renew itself.
Some organizations are born agile, such as Amazon. That’s how it rose to leapfrog ahead of brick-and-mortar stores to become a serious contender to retail’s No. 1 brand, Walmart. Decelerated by archaic approaches to agility, Walmart, which was the top brand in retail for decades, was forced to move away from the waterfall model after Amazon’s success with the agile methodology scrum. Today, Amazon has raced ahead of Walmart as the world’s largest retailer.
Amazon’s agility is in its double helix, and it has never been restricted to its product development. Scrum, Kanban and iterative development methodologies are important, but they can take an organization only so far. Being agile is no longer restricted to software development; it must permeate the culture of the workforce.
Today, many enterprises fight lethargy caused by traditional paradigms that are incapable of addressing current agility requirements. Employees in large organizations sometimes misinterpret the CEO’s vision of innovation because they feel disconnected or incapable of executing the vision. This means that productivity falls, innovation tanks and high attrition hinders performance. So, how can enterprises minimize costs and bureaucracy? How can they motivate teams to innovate? And how can enterprises stay a step ahead of customer demand?.
Teams With An Entrepreneurial Mindset
Traditionally, teams within large enterprises are departmentalized, hierarchical, replete with multiple approval cycles and sluggish. And if a company’s revenue needs to grow by 10 times, its teams also grow by 10 times. On the contrary, startups are fast, curious, iterative, cost-effective and customer-oriented.
Large enterprises looking to scale can easily lag behind startups if they continue to operate like a crawling mammoth. They need an unfailingly agile startup mindset. And to do that they need to analyze their foundations or teams and check for agility.
Jeff Bezos once said, “If you can’t feed a team with two pizzas, it’s too large.” It rings true to this day. Creating these small, two-pizza teams is a good starting point in the journey of an enterprise to agility. The underlying factor is that enterprises must also break the shackles of hierarchies and provide a framework that allows these two-pizza teams to thrive.
So, what makes these teams different from their traditional counterparts, apart from being small? These teams are cross-functional and autonomous. They have the skills to manage the entire lifecycle of product development — from design to production. They work like a startup made up of domain experts, with the stability of a large enterprise.
This is the blueprint for the success of SAAB's aeronautical division. As the creator of the most cost-effective military aircraft (the Gripen), the enterprise is a showcase of how agile drives exceptional performance. Today, most of its teams are small (about nine members). These teams are autonomous, cross-functional and follow the scrum agile methodology. They attend standup meetings every day and, after three to four rounds, decide the priorities for the day. Every team has a sprint of three weeks, and SAAB has been known to deliver business value every couple of months. Its teams are not horizontally aligned; instead, they are structured as a vertical, such that they can solve problems autonomously and without dependencies. Engineers are led by a program manager and product owner.
A Network Of Startups
Small teams cannot take responsibility for the entire gamut of offerings. That is why an enterprise must create multiple small teams or startups and connect them through a stable network. These cohorts or networks cannot be larger than 100, as it will then recreate the confusion and ineffectiveness of traditional teams.
Take, for example, a technology service provider that offers solutions across industries, including finance. The finance unit of the service provider will be rooted in small autonomous teams. Each team focuses on separate aspects such as retail banking, wealth management, asset banking and more. Together, these teams work to form a network that solves challenges in the financial sector. Led by a captain, this network conducts regular meetings where teams showcase their learnings and exchange notes to ensure that every member is on the same page.
Spotify is the world’s leading music-streaming app. Its journey from 2008 until now has seen many successes and breakthroughs. Behind this success is a team of passionate squads, tribes, chapters, guilds, trios, alliances and chief architects. Yes, in Spotify vocabulary, squads imply the small autonomous teams that I mentioned above, and tribes are the networks of teams. Together, this framework has enabled the company to offer music to over 232 million users, including 108 million subscribers across 79 markets.
Enterprises that embrace such agility will tend to solve problems more easily, given that there are no rigid rules toward creating solutions. Greater autonomy will also catalyze innovation and lead to happier workers and minimal processes. Driving value and quality will be simpler and faster.
I want to underline a word of caution as enterprises get started toward agility. The agile workforce structure of Spotify, Amazon or Microsoft may not work as well for your organization because the context differs. You need to evaluate the priorities of your enterprise and team.
To get started, introduce agile practices into a few teams, and learn and improvise as more teams follow suit. Remember, agility is not a destination but a journey. I urge you to take this journey and avoid the consequences of having to manage a monolithic organization with layers of bureaucracy.