MBA 8225: Organizational Agility - J. Mack Robinson College of … · 2013-01-11 · © Richard Welke 2002 Mike Gallivan Lars Mathiassen Richard Welke Dane Truex MBA 8225: Organizational

© Richard Welke 2002

Mike Gallivan Lars MathiassenRichard Welke

Dane Truex

MBA 8225:Organizational Agility

© CEPRIN (2007) MBA 8220 #3 Organizational Agility 2

Agenda

The agility challengeSense-and-respondResponse ability


Topic one


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-whyProcesses, e.g. practiced patterns of play, contribute to know-howValues, e.g. priorities and outcomes, contribute to know-why

The challenge of the players is to respond in-flight to oppositionmoves and conditions of play. This requires swift interpretation ofnow, optimal execution of practiced playing capabilities, andcapability to improvise.The challenge of the coach is to create and maintain anenvironment in which players become empowered to execute. Thisrequires continuous practicing of individual and collective patternsof play combined with cultivation of individual and collectivecapabilities to adapt.


…and Other Sports

“I skate to where the puck is going to be”

Wayne Gretzky

“I get the rebound before the shot istaken”

Bill Russell


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 ofexternal and internal forces”

EconomicEconomicforcesforces

BusinessBusinessforcesforces

OrganizationaOrganizationall

forcesforces

ITITforcesforces

WorkWorkforcesforces

GlobalizationGlobalization

EmergingEmergingMarketsMarkets

EmploymentEmploymentunrestunrest

CostCostReductionReduction

SharedSharedProcessesProcesses

DistributedDistributedbuyersbuyers

SourcingSourcingoptionsoptionsFundingFundingmodelsmodels

ChangingChangingCompetencieCompetencie

ssLeadershipLeadershipDistributedDistributed

decisiondecisionmakingmaking

EnterpriseEnterpriseArchitectureArchitecture

Real-timeReal-timeInfrastructureInfrastructure

PriorityPriorityprojectsprojects

DistanceDistanceCollaborationCollaboration

VirtualVirtuallearninglearning

GlobalGlobaldiversitydiversity

Ambrose & Morello, Designing the Agile Organization, Gartner 2004


What Enables Agility?

Provide continual feedbackProvide continual feedbackBuild contextual orientationBuild contextual orientationCommunicate meaningfullyCommunicate meaningfullyInvest in knowledge networksInvest in knowledge networks

AwarenessAwarenessDo people know thatDo people know thatsignificant change issignificant change is

afoot and the impact itafoot and the impact itwill have?will have?

Encourage reassignmentEncourage reassignmentDevelop new competenciesDevelop new competenciesAssemble diverse teamsAssemble diverse teamsUse multiple service providersUse multiple service providers

FlexibilityFlexibilityAre people equipped toAre people equipped to

respond to a wide varietyrespond to a wide varietyof business conditions?of business conditions?

Reward collaborationReward collaborationBuild learning portfoliosBuild learning portfoliosExpand decision-makingExpand decision-makingAdopt consistent processesAdopt consistent processes

ProductivityProductivityCan people operateCan people operate

effectively and efficientlyeffectively and efficientlyas conditions change?as conditions change?

Organization Organization agilityagility

Ambrose & Morello,Designing the AgileOrganization, Gartner 2004


How to design agility?Executives as architectsSystems design complementsprocess design

A system is a collection ofelements that interact toproduce an effect thatcannot be produced byany subset of the elements

1. Top-down2. Synergy3. Relationships4. Environment5. Event-driven

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


Topic two


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


Learning

Missionand Policy

Command& Control

Management system

Structurefunctionalhierarchy

Strategy• Objective• Plan

ContextPurpose and BoundsAdaptive structure

A closed system

ExternalSignals

InternalFeedback

COMMAND-AND-CONROLCOMMAND-AND-CONROLAssumption:Assumption:

Predictable changePredictable changeGoal:Goal:

Efficient enterpriseEfficient enterprise

SENSE-AND-RESPONDSENSE-AND-RESPONDAssumption:Assumption:Unpredictable changeUnpredictable changeGoal:Goal:Adaptive enterpriseAdaptive enterprise

Coordinationof capabilities

Commitmentmanagement


Command-Control vs. Sense-RespondMindsetMindset Command-ControlCommand-Control Sense-RespondSense-Respond

ContextContext Efficient system in a semi-stableenvironment

Adaptive system in an unpredictableenvironment

Know-howKnow-how Embedded in processes Embedded in people & processes

ProcessProcess Mass production Modular customization

PerformancePerformance Efficiency and predictability Flexibility and responsiveness

ProfitProfit Margins on products ROI and economies of reuse inmodularization and response

OrganizationOrganization Functional and sequential activity Networked and parallel activity

InformationInformation Functionally managed and optimizedvertical views

Focused on information needed torespond to requests

MarketMarket Sustain share of market Sustain individual customers

ExecutionExecution Strategy executed through plan Strategy executed through adaptivebusiness design


People inRoles

Accountable for

Outcomes

Processes that Learn

Sense

Decide

Act Interpret

•What does each of ourexternal customersneed?

•What does each of ourinternal customersneed?

•What are the emergingmarket opportunitiesand needs?

•Which technologicalinnovations areavailable?

•How is the competitionchanging?


Responsive GovernanceEnsure local autonomyFacilitate overallcoordinationProvide a context forbusiness behavior (Know-why)

Share organization’s“Reason for Being”Share governingprinciples

What will wealways doWhat will be neverdo

•Autonomy to respondto external and internalcustomer requests

•Shared strategy acrossprocesses

•Explicit will do and willnever do to supportprocess execution

•Coordinationmechanisms acrossprocesses


Dynamic CommitmentsThe organizationmust know howto effectivelyexecute its coreprocessesThe organizationmust dynamicallymanage who doeswhat when inresponse to itsenvironment

•Processes thatrespond to external andinternal customerrequests

•Processes thatimprove corecapabilities

•Dynamic resourceallocation acrossprocesses


Modular Processes and OutcomesProducts andservices must bemodular tofacilitate swiftcustomizationand innovationProcesses mustbe adaptable tosuit differentcontexts andneeds

•A component-basedarchitecture of coreproducts and services

•Customized solutionsto external and internalcustomers

•Dynamic configurationmanagement

•A minimal set ofshared core processes

•Complementaryprocesses forcollaboration with keycustomers


Assess business and process agilityWhat kind of sense-and-respond mechanisms arein place to address environmental changes?

Do these mechanisms effectively address predictable aswell as unpredictable changes?

What kinds of governance mechanisms are in placeto ensure process performance, coordination withpartners and other processes

Capability to identify process innovation opportunities?How are commitments managed and adjusted toaccommodate process performance and change?To what extent are processes and outcomesdesigned to allow for local adjustments and easyreconfiguration?


Topic three


Response ability

Knowledge portfolio management (KPM) +Collaborative Learning Facilitation (CLF) KnowledgeManagement (KM)

Change Proficiency (CP) + Reusable and reconfigurableStructure (RRS) Response-ability (RA)

RA + KM Agility

Dove: Response Ability: The Language, Structureand Culture of the Agile Enterprise, Wiley, 2001


Change proficiencyMeasured by: elapsed time to change, cost, predictivequality, latitude for change (scope)

InnovativeFragile

AgileOpportunistic

Response-ability States

Proactive proficiency(Leadership)

Rea

ctiv

e p

rofi

cien

cy (

Via

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ity)

MaturityMaturityStageStage

GeneralGeneralCharacteristicsCharacteristics

Example: HRExample: HR

Accidental Stumble throughchange

Hires what’savailable; hopethey work out

Repeatable Set of rules forachieving changeemerge

Common hiringritual to get newskills

Defined Rules broadened;metrics in place

Knowledge-based recruitand screen

Managed Objectives clarified,rules refined,accountability

Individualizedemployeedevelopmentprogram

Mastered No longer rule-based; actions byprinciples

Environmentenables self-development


Reusable-reconfigurable-scalableAgility is accentuated or inhibited by the design ofkey enterprise systemsBalance between rigidity (where nothing happens inresponse to change) and chaos (where changes arenot discriminated)Ten RRS principles:

Self-contained units (separable, self-sufficient)Plug compatibility (share defined interaction)Facilitated re-useFlat 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)


Collaborative learning mechanismsDisagreement Others can challenge concepts and

conclusions individuals take for granted

Alternatives Others will offer alternative concepts andconclusions to individual perceptions

Explanation Externalizing internal thought transformstacit knowledge into explicit knowledge

Internalization Participative dialog conveys concepts thatintegrate with internal knowledge

Appropriation How one’s concepts are adopted by othersputs the concepts in new perspectives

Shared load Multiple levels of thought are explored andintegrated simultaneously

Regulation Consistency is monitored and discussedfrom multiple viewpoints

Synchronicity People tend to help each other achieve amutual level of understanding

Indi

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Documents

MBA 8225: Organizational Agility - J. Mack Robinson College of … · 2013-01-11 · © Richard Welke 2002 Mike Gallivan Lars Mathiassen Richard Welke Dane Truex MBA 8225: Organizational