The Five Trademarks of Agile Organizations is a great article shared by McKinsey & Company, that I discovered when studying Cloud & DevOps: Continuous Transformation at the MIT Professional Program in 2022.
In this article the McKinsey Agile Tribe shares their experience and research about key components of agile organizations. They state that agile organizations consistently exhibit five trademarks.
Firstly, the article challenges the old organizational paradigm, which flourished from the Ford Motor Company’s success in the beginning of the 20th century, where organizations were seen as machines. In the 21st century, this old paradigm was challenged by the “digital revolution”, which introduced disruptive trends, such as the rapid change in demand from customers, the constant introduction of disruptive technology, the digitalization and democratization of information, and the new war for talent.
A new paradigm then emerges, the agile organization, where companies are seen as living organisms. This new approach can easily outperform the old paradigm because of its adaptability to the disruptive trends mentioned previously.
The Five Trademarks
The goal of the article is to clarify the five trademarks of agile organizations, and the subsequent change introduced in the organizational mindset. These trademarks can be summarized as follows:
1. Strategy: North Star embodied across the organization
The mindset shifts from a company in an environment of scarcity, which generates value for shareholders, to a company that recognizes the abundance of opportunities, and co-creates value with and for all of its stakeholders.
Key practices include: Shared purpose and vision, sensing and seizing opportunities, flexible resource allocation, and actionable strategic guidance
2. Structure: Network of empowered teams
Mindset shifts from a company where people need to be directed and managed, who otherwise won’t deliver results, to a company with talented and engaged people, with clear responsibility and accountability, which figures out how to deliver exceptional results.
Key practices include: Flat structure and clear accountable roles, hands-on governance, communities of practice, active partnerships and eco-system, open physical and virtual environment, and fir-for-purpose accountable cells.
3. Process: Rapid decision and learning cycles
Mindset shifts from a company that delivers the right outcomes, with top down management, detailed planning, and thorough risk management, to a company in constant evolution that embraces uncertainty and is quick and productive at trying new things.
Key practices include: Rapid iteration and experimentation, standardized ways of working, performance orientation, information transparency, continuous learning, and action-oriented decision making
4. People: Dynamic people model that ignites passion
Mindset shifts from a company where leaders need to control and direct work to achieve outcomes, to a company where leaders empower employees to take ownership and drive the organization toward fulfilling its purpose and vision.
Key practices include: Cohesive community, shared and servant leadership, entrepreneurial drive, and role mobility
5. Technology: Next generation enabling technology
Mindset shifts from a company where technology supports the rest of the organization, to a company where technology is integrated and core to every aspect of the organization, unlocking value and enabling quick reaction to business needs.
Key practices include: Evolving technology architecture, systems and tools, and next-generation technology development and delivery practices.
By exhibiting those five trademarks, companies are more adapted to thrive in today’s fast changing environment, one full of opportunities.