An HR Glossary for HR Terms
Glossary of Human Resources Management and Employee Benefit Terms
What Is an Agile Organization Framework?
An agile organization framework is a set of strategies and tactics that helps organizations improve many of the shortcomings traditional business models face in the modern world. Agile organizations differ from traditional organizations in how they’re structured, how they divide responsibilities, and their application of technology.
What Are the Characteristics of Agile Organizations?
Agile organizations embrace change and a growth mindset. They’re equipped to react quickly and adapt readily to unpredictable and complex circumstances. While each company may apply this methodology differently, some of the characteristics of agile organizations include:
- Members willing to understand their customers’ needs and customize solutions to create value
- Open communication between teams and individuals, so they can make decisions quickly
- Empowered teams that make detailed, focused changes continually to aid in product development and decision cycles
- Integrated technology within existing processes to improve operational procedures and business agility
Another common characteristic of agile organizations is that they cultivate a shared purpose and vision, keeping everyone in alignment. This vision is demonstrated at all levels of the organization’s hierarchical structure, creating a greater sense of trust and meaning for each person.
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Why Do Companies Adopt an Agile Organizational Structure?
Companies adopt an agile organizational structure to help reduce project costs, raise revenue, and mitigate risk across the board. Many companies also do it to increase adaptability and gain better visibility into the work they do across teams.
Some of the other reasons to adopt an agile structure include:
- To quicken time-to-market
- To better align an organization’s business with emerging technology
- To boost team morale and company culture
- To increase team productivity and collaboration
Applying agile methodologies can give companies a competitive edge in many ways, especially in an ever-evolving industry or market where change is inevitable.
How Is an Agile Organization Structured?
An agile organization is structured for flexibility and cross-functionality. This is different from traditional organizations operating on a hierarchical model where higher levels of leadership make decisions and give instructions for the next level down to carry out. In the traditional model, employees at the lowest levels exercise limited autonomy, focusing instead on efficiency through quick execution.
While a rigid management style may have worked well for putting mirrors on each Model T coming down the assembly line, it doesn’t match the nature of modern work nearly as well. A hierarchy requires lower-level employees to pass information up the chain of command and wait for their decision.
This process is called siloing, and it's characterized by a lack of direct communication and collaboration between teams or departments. Agile organizations combat siloing with fewer levels of leadership and more focus on the connections between teams.
How Does an Agile Organization Divide Responsibilities?
In addition to condensing leadership levels, agile organizations develop more organic teams. For example, while a product development team’s end goal is different from the results a creative team produces, in an agile organization, both might have a dedicated project manager and oversight by senior members of each discipline. This decentralized structure requires a great deal of trust and consistent communication to function properly.
An agile organization empowers employees to analyze data, communicate effectively, and make appropriate autonomous decisions without having every step scrutinized and approved by someone with more authority.
What Are the Challenges of Becoming an Agile Organization?
As with any other type of business restructuring, there are some challenges of becoming an agile organization. Perhaps the most notable is the act of changing every team member’s behavior pattern and the company’s overall employee management strategy.
Learning something new can be difficult and take time, but adopting an alternate outlook on the work to be done (and how to do it) poses even more of a challenge—especially when such changes are being enacted on a large scale across departments.
Other challenges of becoming an agile organization include:
- Finding a knowledgeable and experienced leader to determine gaps and problems that having more agility can correct
- Training employees sufficiently to build the momentum and motivation that draws the company closer to achieving high levels of agility
- Adopting a communication system and style that works well in a more agile business environment
- Keeping customer satisfaction high throughout the change process and beyond
Agile organizations with remote employees also face other obstacles. With teams scattered across the globe, leveraging technology is essential to fostering better collaboration across the company and helping everyone remain connected.
How Does an Agile Organization Use Technology?
Agile organizations are only possible because of the advances in analytic and communication technologies. With the support of centralized data locations, chat, video conferencing, and more, teams can share and access needed information without having to search through irrelevant information.
Technology provides the efficiency and accountability agile organizations need to achieve their goal of a more connected, supported workplace, especially those with remote teams. Providing accessible data and clear communication helps employees do their best work, while clear reporting helps management and senior leadership collaborate, make proactive decisions, and recognize employee efforts.
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