The Urgent Call for Agile Organisational Transformation

As we progress deeper into the dynamic landscape of the 21st century, our long-established organisations, born of the Industrial Age and infused with a DNA of strict command and control, stand on shaky ground. These organisations strut with command-and-control bravado, erecting clear hierarchies in their stable inert markets where bureaucracy reigns supreme. However, they are feeling the tremors of a rapidly evolving, technologically charged dynamic markets and are plagued by sluggish responses and missed opportunities, which are their Achilles heel in these new fast-paced markets. Not since the 1970s has the classic hierarchical model, rooted in the stagnant waters of stable markets, been a viable proposition for companies seeking to thrive in an era of unprecedented change and unpredictability. Clearly, we cannot continue to coat deep-seated hierarchical practices with a thin veneer of modern innovation and expect sustainable transformation.

I see countless individuals trapped in the bureaucratic maze of classic hierarchical organisational structures, their creative potential stifled, their drive for innovation subdued. The belief is that switching to a more modern network model could liberate them from this stifling environment, fuelling both individual and organisational growth.

Command & control has overcome agility, but it’s not a lost cause.

There is hope in many new and old organisations moving towards a more market-focused approach based on the Follett’s principles of decentralisation and democratisation of the workplace. A world where cross-functional teams dance directly with market demands, while the rest of the organisation provide the necessary services to enable those teams to be nimble and adaptable, they ride the waves of the change markets.

While market dynamics have shifted dramatically over the last half-century, the operations of businesses have remained stubbornly static. Businesses yearn for the capacity to flex and adapt in response to the ever-changing market landscape, but this requires more than just minor tweaks to team operations. Most big businesses’ current processes, procedures, and practices are finely tuned to maintain the status quo in they were developed in. The need of the hour is for businesses to radically overhaul their organisational architecture to facilitate better alignment with contemporary markets’ swift, volatile pace.

Agile was that attempt; sadly, agility has lost the battle against the monolithic paradigm, and the ghosts of hierarchical structures continue to haunt our organisations. The inherent flaws in most organisational transformations lie in their inability to address the root causes of dysfunction, opting instead for the allure of quick fixes and superficial changes. This approach does little more than perpetuate the reign of command and control, allowing it to thwart the advance of agility.

Moreover, the high failure rates associated with organisational change initiatives have desensitised people towards change, leading to widespread apathy and scepticism. Why invest energy in an endeavour doomed to fail?

Tracing the historical trajectory of the market landscape, we see the colossal momentum generated by the Industrial Age, characterised by rapidly expanding stable, long running, markets and limited competition. A relative state of stasis governed these markets, creating a safe haven for businesses to grow unopposed with a focus only on productivity and ignorant of effectiveness.

During the height of the industrial revolution, Fredrick Winslow Taylor crafted what would become business models tailored to this market reality. Born amidst the emerging markets dominated by textiles, steel and large-scale goods production, this hierarchical model thrived in the predictable, slow-changing, or ‘Inert’, markets.

As the 20th century dawned, competition intensified, and product diversity increased, nudging markets from the predictability of stagnant towards the dynamic, complex, and volatile nature that they have today. This shift gained momentum in the 1940s with the advent of television and software, spreading ideas at a breakneck pace.

The advent of the microprocessor in the 1970s and the euphoria surrounding the moon landings pushed the economy into overdrive. These events marked the transition of almost all markets to the complex dynamic, and the classic organisations, unable to cope with the speed of change demanded by these markets, began to falter.

This transformation, however, went largely unnoticed, and many businesses, although effectively obsolete, continued to lumber forward, propelled by financial reserves, customer goodwill, or sheer scale. Vast amounts of waste encumbered them, and if these organisations fail to breathe life into their moribund structures, they will indeed stumble and fall, though it may take them many years to do so.
Moreover, I’ve noticed a tendency for businesses that initially abandon hierarchical practices to slip back into old habits as they grow. An even more profound realisation is that all start-ups are dynamic network organisations. However, these businesses gradually transformed into monolithic organisations characterised by hierarchies, departments, and command-and-control dynamics without regular hygiene or refactoring.

They build up organisational cruft.

Enter the network organisations, born out of Mary Parker Follett’s revolutionary concept of a decentralised organisational structure. Leveraging her social work experience and fascination with organisational dynamics, Follett centred her approach on social organisation.
Every hierarchical organisation has an underlying network-based organisational structure, a network of communication and collaboration that drives success without relying on the steering and escalation mechanisms that the hierarchical model so heavily depends on.

Despite the rise of numerous attempts to create more dynamic organisations – from the Scaled Agile Framework (SAFe) to the Spotify Model – many of these initiatives merely layer more control mechanisms atop the existing hierarchical model and already excessive bureaucracy.

The time has come for a resurgence, a renewed drive towards the modern network organisational model. Agility’s dream of a decentralised, democratic, low-atrophy organisation that can swiftly adapt to market changes is not an impossibility. To make this dream a reality, we must shift away from classic models and move towards modern ones. However, we continually allow the classic to persist.

As agile practitioners, we’ve enabled this complacency by making organisations believe that only minor changes are necessary. We must challenge these misconceptions, actively promote modern models and practices, and stop accepting that organisational change will take years.

With concepts such as OpenSpace Agile and OpenSpace Modern, we can transform from the traditional, rigid classic model to the modern, adaptive model that can truly thrive in the face of complex, modern markets within only a few months.

Then, with the continued application of constant refactoring and organisational hygiene, we can maintain an agile, modern organisation at scale that can continuously adapt to the changing needs of whatever the market throws at it.

References:

Here is a list of the books, blogs, and content that may have influenced my ideas and positions for this post:

• Organize for Complexity: How to Get Life Back Into Work to Build the High-Performance Organization by Niels Pflaeging and Pia Steinmann 

• Reinventing Organizations: A Guide to Creating Organizations Inspired by the Next Stage of Human Consciousness by Frédéric Laloux and Ken Wilber 

• This Is Beyond Budgeting: A Guide to More Adaptive and Human Organizations by Bjarte Bogsnes 

• OpenSpace Beta 

• BetaCodex Network - Learn about the Alternative to Management!