By Brian Lucas
This one is dedicated to Bill Gore and all those who came after him like Reid Hoffman and Jeff Weiner.
“Change before you have to”. –Jack Welch
The stress that all organizations are under today is unprecedented. In the last 20 years, two-thirds of non-financial S&P 500 companies didn’t survive. CEOs are being replaced with a rapidity that rivals anything we have seen in the past. Bankruptcy and insolvency is rampant, even for the largest corporations. Some simply shrug their shoulders and mark it all down to capitalism. What is really going on is fundamental change at a pace that leaves many in business confused and in a state of future shock.
In 1970, Alvin Toffler, in his seminal work Future Shock, described a trend of significantly accelerated rates of change. He demonstrated how social and technological norms had shorter lifespans with each generation, and stipulated society’s ability to cope with the resulting turmoil and anxiety was doubtful. In past generations, periods of change were always punctuated by times of stability. This permitted the society in general to assimilate the change and resolve its impact before the next change arrived. But these periods of stability constantly grew shorter and by the late 20th century all but disappeared. In 1980, in The Third Wave, Toffler characterized this shift to relentless change as the defining feature of the third phase of civilization which was preceded by the agricultural phase and the industrial wave. He claimed that the dawn of this new phase will cause great anxiety for those that grew up in the previous phases, and cause much conflict and (please take special note) opportunity in the business world.
This requires a change in strategic management. Strategic management’s history is varied. Alfred Chandler, promoted an all-encompassing strategy for all the various aspects of management in his ground breaking work, “Strategy and Structure” and later on his Pulitzer Prize winning work, “The Visible Hand: The Managerial Revolution in American Business” in 1977. Peter Drucker, the phenomenally accurate futurist, emphasized the importance of management by objectives (MBO) and predicting the importance of knowledge workers and intellectual capital. Philip Selznick defined the matching of organization internal aspects with the external environment known as SWOT (Strengths Weaknesses Opportunities Threats).
Strategic management has a direct effect on organization structure. Organization structure has, in fact, been affected by the various strategies of strategic management since the early days of Capitalism. Resulting in the following 7 phases:
Early days of Capitalism – The Product/Service Oriented Strategy
The 1960s – The Sales Oriented Strategy
The 1970s – The Marketing Oriented Strategy
The 1980s – The Active and Interactive Oriented Strategy
The 1990s – The Value Chain and Optimization of Resources Strategy
The 2000s – The Living Company Strategy
The 2010s – The Learning and Agile Strategy
We are now in the Learning and Agile Strategy phase where businesses must change their structure fluidly in response to ever changing customer needs and market pressures. Jack Welch says in Straight from the Gut, “Change before you have to”. The need to precede market demands with organizational adaptability, which can anticipate those demands and meet them at the beginning of a cycle, is the difference between enterprise success or business failure. The market turbulence of the last 6 years has clearly shown the influence of globalization and volatility which will remain constant for the foreseeable future. Even with a rebuilding economy, the underlying fluctuations in commodities, currency rates, energy and the emergence of a vast array of new and non-traditional competitors will constantly challenge traditional business and operating models making them obsolete.
Yet survey after survey show that executive managers in most companies feel their organization is not agile enough to take advantage of market swings. So how can an organization become agile to take advantage of the market opportunities Toffler predicts without the ensuing chaos or loosing accountability? Well W. L. Gore wrote about adaptability in his groundbreaking design of the Lattice Organization Structure where he defined it as follows:
A lattice organization is one that involves direct transactions, self-commitment, natural leadership, and lacks assigned or assumed authority. . . Every successful organization has a lattice organization that underlies the façade of authoritarian hierarchy. It is through these lattice organizations that things get done, and most of us delight in going around the formal procedures and doing things the straightforward and easy way. —Bill Gore
This is a radical departure from the traditional hierarchic organization structure and line of authority. It presents the following fundamental change in philosophy:
No fixed or assigned authority
Sponsors (mentors) not bosses
Natural leadership defined by followership
Person-to-person communication
Objectives set by those who must make things happen
Tasks and functions organized through commitments
This looks so much like the agile manifesto for application development that it is surprising more organizations trying to do agile development have not made this adaptation. Just compare the two:
The Agile Manifesto – We are uncovering better ways of developing software by doing it and helping others do it. Through this work we have come to value:
- Individuals and interactions over processes and tools
- Working software over comprehensive documentation
- Customer collaboration over contract negotiation
- Responding to change over following a plan
That is, while there is value in the items on the right, the value the items on the left is greater.
Why do some organizations still cling to a hierarchy? Gore answered it best when he said,
Without doubt, there are challenges to a true lattice organization that are not easy to overcome, but it is feasible to incorporate the advantages of various organization structures into a hybrid structure and have the best of all worlds. A hybrid solution to the organization structure conundrum uses a functionally designed hierarchical structure where work is assigned by product or initiative. See the sample below:
The functional organization aspect provides economy of scale advantage and proficiency of expertise while the hierarchical organization promotes clear lines of authority and performance rewarding. Assigning work by product or initiative gives the advantage of promoting team thinking and team work with focus on the success of the product or initiative and therefore the organization rather than the individual.
This is not a matrix structure; it is actually the evolution of a hybrid structure that is one step closer to a true latticed web structure or virtual corporation. The hierarchy is the financial and sponsor structure and more fixed. This gives stability. The work structure is highly flexible and environmentally responsive. The key concept is that individual employees report to one structure governing behavior. Teams report to another structure governing work. It does not have the limitation of being able to support only a few products or initiatives. It does require dual planning with the hierarchy supporting the product structure. The functional organizational structure exists as a servitor to the work related one.
Performance management for the individual is governed by the manager of record in this structure. All work however, is performed by a product or service structure that is highly latticed or networked. Here performance is monitored at the team level and not the individual person. Success or failure is the joint responsibility of the entire team because it chooses to inculcate itself and then accept responsibilities of individual items of work to accomplish a particular initiative.
How are the performance management system assessments divided? Assessments from the hierarchy focus on the behavior of the individual while assessments from the product structure focus on the success of the team. Usually a 50-50 split is the most efficacious. The hierarchy manager conducts the performance management with individual 360 degree input concerning the employee’s behavior and statics gathered from project management and other tools that objectively record the accomplishments of all the teams on which the employee is active.
This might seem complicated, but it is not. While it is true that you can have two or even more managers, none of their directions should be conflicting since they govern differing areas. As far as priorities are concerned, the various product or service managers settle any potential conflicts outside of the team setting. As a rule, if you are doing agile you should be focusing on one initiative at a time anyway. Your hierarchy manager is a service manager that works to see that sufficient human resources are available to meet the needs of the product and service managers. If you are following scrum, the scrum master’s role is to facilitate and remove obstacles, not manage the release or iteration.
As you can see, the structure is firm where solidity is needed and fluid where responsiveness is required. It can interface with third parties and vendors in a highly organic fashion. In short, it is all things to all people. If this sounds too good to be true, like Bill Gore says you will find some form of this structure working at times very surreptitiously in all successful companies. The extent which this virtual organization identity has to “buck the system” determines how effective it is and usually the company’s success. Executive boards and CEOs need to understand this and gain a new perspective and basis of operation that leads to top management success and continuity. Till next time – keep agile!
Keeping Agile™ with Brian Lucas 
I am not sure I understand the structure that you are presenting here. We have had a number of organizational issues at our company and have been discussing the need to change our organizational structure. What you are proposing here looks interesting, but I am not sure I understand how it really works. Do you have a webinar on this that covers how the organization actually functions in more detail? Or could you point me to another source of information?
Mary – I am working on a webinar now about agile organization structures. I will post a notification on this site when it is done. -Brian
Brian, I am rereading this post for the 4th time! I can tell you that’s a first for me. And let me be clear, a very pleasant one. Do you have any time estimates on how long it takes to transform an organization to this type of structure? I realize that it would be subject to organization size. Sally
Mary let me take a crack at explaining what Brian is talking about. Your hierarchic structure runs the enablement side of the business, keeping the lights on, accounting, legal, etc. It looks like your business right now. When you get down to the level of management that actually directs the primary work of your business a new and independent structure is used. Whether your business is product or service oriented this structure has various line managers. They become the owners of the concept and get funding from the executive sponsors in the hierarchy. They also get all their resources from that structure since they don’t own people just products and services. The hierarchy owns the people, but has nothing to say about the products and services. Putting these two structures together makes it a hybrid solution as Brian calls it. I think we all have to give Brian a bit of breathing space here. I person with his level of knowledge and company position has many demands on their time. I am sure he has his hands in many things and not just this blog. Good as it is.
BRIAN, AS THE OWNER OF A TECHNOLOGY DRIVEN STARTUP I UNDERSTAND THE NEED FOR AN AGILE ORGANIZATON… I DO NOT KNOW HOW TO MAKE THIS ACTUALLY HAPPEN… ASSUMING THE COMPANY YOU WORK FOR IS ORGANIZED THIS WAY – HOW DID THEY GO ABOUT IT? A REAL LIVE EXAMPLE WOULD BE HELPFUL.
Howard – I am working on a webinar about agile organization structures now and it will contain examples. -Brian
Howard asks a question that I understand your reluctance to answer directly. You don’t promote your company directly, but instead offer valuable information, perspective and education. This gives you a great deal of credibility in my book. I have noticed though Brian that you are not as active in this blog as you once were. It seemed that you were replying to comments almost immediately and posting at least once a week. I hope you are not going to abandon us…….
I felt this article was complementary to Life in the C lane, which is why I read it. It does explore the subject of agile organization structures more, but I would like to see how you actually go about doing this and if there are any examples of a large organization that have done this. I would think that would be a great subject for a next post. I find much value in your blog, most are loaded to reprinted material or personal opinion. These articles are excellent whitepaper quality with very relevant topics. Well Done! Mike
Mike – Thanks for becoming a regular reader. As I said in my other reply to you I am/was working on a webinar on this subject as time permits. -Brian
Hi Brian: Any update on the webinar? I really am anxious to see it?
Brian, great article and ditto to others that wrote in. Please include me when you finally get around to your webinar for implementing agile organizational structures. I’m interested in attending. Thanks, Andy, Charlotte NC
Andy – I will definitely add you to the notification list. Thank you for your comment. I appreciate those who take the time to comment very much! I take blogging seriously. I try not to write the type of 300 word random stream of consciousness that looks like it was dictated while driving in to work in heavy traffic. Too many others do that and I always felt it wasted the reader’s time. So I write factually researched, curated articles in the 1,500 word range. I take webinars even more seriously and refuse all pressure to run-them-off in a single day, loaded with unsubstantiated personal opinion and cartoon drawings. To some this sounds like I am not being agile, but I have always maintained that agile is not low quality or quick and dirty; it’s about focusing on what is important and being successful. To me, in blogging, that is high value posts with detailed facts and practical advice wherever possible. Thanks for being a reader! -Brian
Andy – you’ve said it! I can’t wait for this webinar! I could really use it now. I wish Brian posted more often, but I am reading between the lines (so to speak) and I guess that blogging is not his primary responsibility where he works. I wish it was! His posts don’t have the fluff in them like other blogs. They provide valuable detailed information and new ideas. -Sally
Sally – I of course recognize that you are one of my most faithful readers and commentors. That you for your readership and support! Your comments mean a great deal to me and I hope you will share the details of your latest agile reorganization with me by email. Thanks agian and good luck! Let me know if I can help! -Brian
I too would be interested in any additional materials that you are willing to share on this subject or can point me to. I am working on a reorganization project and I feel it is going in the wrong direction. It is supposed to be a reduction in layers. It seems to be ending up to be more of a change in titles than restructuring. I don’t think our consultants are really helping out. I need more knowledge to suggest a change.
I am very impressed with this post! As a CIO I have seen our company struggle with the organization shape and size for over 7 years. We have often changed reporting structure and at times leaned down our employee population to the point where it was costing us customers because we could not fulfill orders. A decade ago we were quite profitable. The salary and perks for us at the C Level was very attractive. Three years ago our earnings were flat. Now this is the second years in a row we are in the red. This post looks to have stated clearly the reason for and the solutions to our problems. I noticed you said you are doing a webinar on this subject. Will it be soon? Also can you point me to some other bibliographical information sources? JasonR
Jason thanks for your comment. I am working up a bibliography for a webinar I am trying to do on agile organization structures. When I have it put together I will email it to you directly. -Brian
Thank you for this post, it is great! I am working with a company to set up a more agile structure such as you are refering to here. I have read about virtual corporations, extended enterprises and managed services and have direct work experience with all three. I really like the way you have framed the agile organization structure in this post. It seems to solve a number of problems that I have encountered in working with these structures in the past. Have you done any webinars on this subject or do you have any additional white papers on this. It would be very helpful if you could describe how the external links to vendors are handled in the structure you have shown. Thank you so much for your great work. Sally
Sally, thanks for commenting and it is great to hear from someone who is working to set up an agile organization structure. The hybrid structure goes beyond a virtual corporation. It really is the best of both worlds. If you want to explore this subject immediately send me an email and we can chat. -Brian
Sally if you are open to including me on this email stream I would like to participate. Brian is the kind of mover and thinker that many companies need today. I recognize that as you do.
I hate to be a hanger on here, but can you include me as well?
Drew if you still have this stream and are willing to share I would appreciate it very much. I am struggling with a realignment project and am looking for a new approach. Unfortunately we don’t have money for consultants or I would call on Sally.
This is such an important subject. So many companies even the largest ones are struggling with this now. I like what you have written and especially like the fact that you are avoiding mentioning matrix management as a term. I noticed in your other post on this subject that a reader wanted you to explain it in those terms. I feel that matrix management as a concept is outdated and cannot meet the needs of a truly agile organization. I like your term hybrid to explain what you are defining here. Obviously there is a lot more to doing this than you have in your posts and I appreciate that you could not include all the details of your approach with it becoming to much for a blog. However, I do believe you have hit on something here that is both profound and simple. I would like to add my voice to others here and encourage you to create a webinar on this subject. I for one would definitely wish to attend.
Jason I will add you to the contact list and let you know when the webinar is ready. Unfortunately, right now I am doing this on my own time so the webinar plans might be delayed. But keep voicing your opinion, the extra requests will move this along faster! -Brian
Brian – I want to echo what Jason has said he. I have found matrix management the way it is usually implemented to not work very well. Many of these efforts are implemented halfheartedly and a political hierarchy still exists where threats and political influence run counterproductive to the goals of the reorganization. I have also read your post, “Is Agile Mission Impossible?” – I wonder if you would consider making a checklist like that for agile reorganization. You have such a remarkable talent for getting to the heart of the matter and explaining a complex subject in simple and understandable terms without losing meaning. I know I would greatly appreciate this checklist! -Sally
Brian just as a follow up I want to thank you for the checklist you sent me. I agree it is rough, but solid in every respect. If you want I will add some more details to it based on what we talked about and email it back to you so you can use it as a post. Thanks for all your help! You are the best!
Sally do you still have this this check list and are you willing to share. I surely would appreciate the help.
Dude you seriously need to post more and do webinars. Your agile organization concepts would make my life as a developer soooo much easier. I have always done agile but like it is a real pain in some companies that just don’t get it. Man lots of others post all the time and have nothing to say. You clearly know what you are talking about so you have to get the word out.
Thanks Danny I’ll try to move things along faster!
Like dude, you never followed up on this where are you man. The hierarchic militants are driving me crazy. You need to make an agile structure a slam dunk man!
Brian,
You have written a very intelligent and valuable post here. I am surprised that I cannot find any other works of yours on the internet. Your writing style is direct, informative and entertaining. This post is a superb expression of Toffler’s predictions and the actual developments that we are now experiencing. The concept of a hybrid organization is very valid and I would go so far as to say a necessity. While you can form a small organization around a team concept the operation of a larger organization of at least 100 persons needs some formality. You have created two branches as I see it in your structure; one that provides operational support for the organization itself and one the services work requests. I have not seen it articulated quite the way you have expressed it before. This is a time of opportunity for businesses and entrepreneurs. It is also a time that will mark the death of many more fortune 500 companies. The efforts of these large organizations to move to a matrix management structure are essentially doomed to failure. This is mostly due to the fact that their overall company concept is flawed. You don’t quite say this in your post, but in reading between the lines I believe you think the same way. A large organization simply has too many people involved in fulfillment for everyone to be an actual contributor in the value added chain. I hope you become a more active poster. I would read your blog every day.
Edward Smith
Business Consultant
Edward – I in turn am very impressed with your ability to ready between the lines. You are correct in my opinion that the matrix management effort in large companies is doomed to fail with very few exceptions. There basic premise and even the accounting concepts they run on are flawed for the new economy. I am also very gratified that you find my blog informative enough to read every day. Unfortunately I have been allocated only 2 hours a week to blog and that is far from sufficient time to write the quality of articles that I wish to communicate. Otherwise I would love to post every day. Thank you for your comment and support!
Edward you have said it all when you stated that the post was “very intelligent” and “valuable”. I have come to realize that all Brian’s posts are valuable and he must be very intelligent to write the way he does. You have put well when you said that there were two branches in the hybrid structure; one that provides operational support for the organization itself and one the services work requests. It sounds like we are in the same business. We at least share the same perspective about this time of opportunity. I am ashamed to admit however, that I had not read Toffler’s books until I saw how much Brian referred to them. Now Future Shock sits on my night stand. -Sally
I agree with Edward, Brian, this is a gem of a whitepaper. I am surprised that you don’t charge for this information.
Excellent post and great blog in general! As the owner of a technology business I can say from experience that everything you have said in this blog is the plain unadulterated truth! I have set up something similar to what you are talking about here and in your other discussions of hybrid organization structures and it is working well. I very much like how you are handling the performance review situation that is a new twist and I am going to test implement it. I will let you know my results. There is very good high value content in your blog, I am just disappointed that you did not yet follow up on a number of posts you mentioned. PLEASE KEEP POSTING!!!!
Lee – Congratulations on your success and I hope you continue to enjoy such! You are taking the right steps so I believe you will be if you are persistent. I will try to post more, but I am doing this on my own time and it is difficult to find the hours. Thank you for your support! -Brian
Never seen a better post!
I like the way you framed this change as an evolution of strategic management. You are the first to coin the term “The Learning and Agile” style of strategic management as far as I can till. It really defines the problem we have in a nutshell and how the strategy has to adopt to meet the challenges we are facing today. I have worked as a planner in a very large company for many years. We have made numerous and serious efforts to become agile and have an agile organization structure. All of them get great press and internal promotion and all have failed more or less. Every larger company that I know of, with one exception, that has tried to implement a true lattice structure that W.L. Gore talks about has failed. This seems to work in smaller to almost midsize organizations, but not large ones. I believe you have hit upon the solution with your hybrid structure. It makes perfect sense and, most importantly, it is essentially simple. One thing though that I wasn’t clear on. How does the product/services segment negotiate service requests from hierarchic operations side? Also how does the Hierarchic side approve the the product/services side’s budget? Any insight you could provide here would be very helpful. Thank you for posting this. Your blog is very original and makes a powerful statement.
Thanks Lou, I have created the term “Learning and Agile” strategic management phase to differentiate it from strickly agile as a term or simply doing things quicker. Agile management is about rapid adaption and working smarter and LEARNING from the environment, your customers and your employees and not being a C level manager full of yourself and only your own ideas. Unfortunately, you are correct there are far too many failed reorganization attempts that were declared sucessful by the architects of its failure and have recieved spurious press. I will send you an email with further details on the questions that you asked. -Brian
Lou I share your opinion. I really like the history Brian has documented about strategic management. He did a webinar called, “Is Agile a Fad or an Evolution?” which he sent me the handout for and it was superb! In it he covered ages of strategic management. I think you would enjoy this webinar, but I cannot find the link that Brian gave me to it. Ask him and I am sure he will send you the handout. He seems to share information very freely which is unusual. I think we should start a campaign to get him to write a book! -Sally
Lou I believe you will find that Apple was and is structured close to Gore’s lattice philosophy. I think Brian’s concept makes a great deal of sense and is practical.
I sure wish you could come to our company and rip out all the idiotic thinking and old boy network politics that is throughout senior management and install an agile organization. Short of doing that can you recommend any good agile organizations that are hiring?
This is a subject worthy of a book! You have several posts addressing this subject and you have brought much clarity to a confusing issue while displaying a profound knowledge of a vast array of subjects. Your writing is exemplary; your perspective laser sharp and crystal clear. Having worked in the publishing arena I would strongly encourage you to write a book. So many others of far lesser talent have and been successfully published. Please consider the possibility!
Dear Mr. Crowley – I am indeed humbled by your assessment of my literary skills. Thank you also for taking the time to send me a personal email. It is much appreciated. Time is always a precious commodity for me, but I have been receiving so much encouragement to write a book by a signigficant number of my blog readers. I am seriously considering several book topics including works of fiction, which I hope doesn’t dismay you. Thank you for being a reader and taking the time to write such a thoughtful and encouraging email. -Brian
I second that motion! Brian should write a book on this. To me there can be no real business reform without significant organization change. Adding a new operational idea into an old fixed organization structure is like asking a car to become a boat. It might float for a while but it will eventually sink.
Great primer on business today Brian! Anyone who questions the volatility of the business environment today is walking in a dark room with their eyes closed. I noticed that your article is structured in two distinct parts a small opening paragraph outlining the problem and the rest of the article which identifies the solution. I had not thought about Toffler in years. I went back to reread his works since you mention him and found his predictions profound. It’s amazing how you have taken us from Toffler’s predictions through a brief history of strategic management to the solution of an agile organization structure.
I suppose there will be two kinds of people that read this post: those that “get it” and are focused on the solution and those that will question your sources and the validity of your estimate on the state of business today. The former will be in the forefront of a new economy. The latter left out in the cold.
Intelligence and simplicity – easy to understand how you think.
I might add 100% right and to-the-point as well Bette. Brian is always dead-on-target in everything he writes. -Rick
I must agree with Rick. I am surprised that you didn’t follow up with this theme though it was so very powerful.
My guess is that Brian is swamped and squeezes out what little time he has for this in spurts. It looks like he is trying to help a start up theater company now and that has to be time consuming, but it must be something he believes in. Check it out in his post https://keeping-agile.com/2013/05/06/a-natural-agilist-proves-the-value-of-theater/ -Rick
The reason why this post has so many comments is that it is damn good. You have identified probably the most important key to enterprise survival today – the need for an agile structure that adapts to the environment not from the top down, but from the bottom up. You are clearly well read in management theory. What I like most about this post is you make your point directly and explain simply without dumbing down your message. I wish I had as much writing talent as you do. You should write full time. There is far too much garbage published today in print and on the internet. With your talent you have a duty to combat it.
Darn! I hate it when people hit me with the, “its your duty” argument.
Well Brian it is so just do it! When you have the level of intelligence you posses and the ability to communicate complex concepts simply you have a responsibility to do do. Whatever else you are doing, and I am sure you are busy, should be looked at in the light of how many people you can influence. Your blog gives you the capability to influence thousands. That is something to consider.
Wow Brian – this is a heady article! While this is not actually the area I am work in, I understood what you were saying and it made sense to me. I wonder if you can implement this structure in an individual department that offers various services like nurses who work on different floors as floaters. Would you mind a few questions by email? I believe what you are proposing here could solve some staffing and management issues we have.-Haley
Haley feel free to email me we can chat.
This is a rare gem! You explain the problem facing business today, then define the need of and agile organization structure and follow it with a description of what it is and how it operates. Simple, clear and it looks like it would be very effective since it represents the best of both worlds. Congratulations on this concept. I hope the business owners will understand it and implement it. Great Work!
Thank you William some will and some won’t.
Brian this is a super informative whitepaper! Do you have any reviews or information on how businesses are doing on implementing agile organization structures as you define here? What is the success rate and how long does it take them?
Brian if you have any more on this that you are willing to share I would appreciate it! I have been charged with researching organization restructuring and your approach makes the most sense to me.
William I suspect that the author is often frustrated by the slowness of others to follow and understand what he says and when they do they often don’t follow the advice because they lack courage or are embarrassed. Thought leaders are often ostracized in their time and worshiped after their death.
Phoebe – I agree Brian is a thought leader and he does give great advice! He is just so much smarter than most people that he thinks through problems faster and clearer. I have spoken with him in person and watched his face as I posed a problem. You can almost see him move from problem to solution and opportunity even as he is hearing the problem. He has helped me out a lot and I admire him greatly. Its a shame more people fail to listen to thought leaders.
With the number of comments you have received on this post I was somewhat hesitant to offer another one, but I found this such a nice piece of work I had to offer my congratulations. I was first struck by the quote from Jack Welch, “Change before you have to.” I admire Jack a lot he is telling us in his characteristically direct fashion to be proactive. Many of us have not followed that advice when it comes to organization structure. We were comfortable in the bastions of our hierarchies thinking ourselves safe, but no longer. You so ably and eloquently make the case for the necessity of change; we can no longer deny the facts and the need. Everything in this article was informative and made great reading. I particularly like your comparison of agile’s manifesto and the lattice organization principles of Bill Gore. It did not occur to me, but it is absolutely appropriate. I admire your ability to identify, analyze and articulate patterns. Your title says it all we are now faced with the imperative of having an agile organization structure. Those who don’t won’t be in business in the future!
Precisely put!
Nice exploration of organization structures and the need to go with the flow of these changing times. I would recommend this post to anyone, but especially those in management who are still operating off of a ridged hierarchic structure. This is a fine blueprint for making your company agile. If you don’t change soon as Brian states here you won’t be in business in the not too distant future. Just look at your corporate structure how many people are at the C level? How much do they cost the company? What do they actually do operationally versus the layer right below them? Do they really know what is going on? It never adds up if you are really honest with yourself. –C.Waters
It is a very unfortunate fact that many at the C Level are not really self aware nor can they be honest with themselves.
Brian this is simply a joy to read and an important statement on what we all need to work on in our organizations to make them functional in the economy of the world today. I like your use of the term agile in the expanded sense of how it applies to the business and not just software development. I have moved from development to management and want to take the aspects of agile I learned in IT to the business world. There is resistance, but your article helps me have a much better perspective. Many thanks my friend!
Thanks for reconfirming the reason this blog exists.
Yes, yes, yes! Please make it so! I would love to work in an environment like this!!!!!!!!!!!!
Being a woman in the executive ranks I unfortunately don’t feel that my male counterparts are open to this type of organization structure. I would definitely embrace this as I believe other women would. We are much more concerned about achieving the goals and understand the value of team work. With some exceptions, of course, we are not as hung up on personal power as most male executives. Despite that belief this is a very well written article and kudos to the author for making a strong and logical case for this kind of organization structure.
Without doubt this is one of the finest treatises on the subject of organization structure I have read. Your thinking is clearly state-of-the-art. I was wondering if you could share with me what you sent to Sally?
Scholarly thinking, intelligently expressed, brilliantly written!
This is one powerful white paper that unfortunately I am sure many executives will ignore. Still, I suspect some will read, understand and implement. One day the this will be the norm and the ignorant will be left out in the cold looking for someone they can order around.
This is the finest whitepaper on agile organization structure that I have ever read. It not only identifies the reason for it, but defines it, and shows how it operates. This is some very seriously valuable information here. I am completely impressed Brian. Thanks for posting!!!
This is in my opinion one of the most important short works on organization structure written in the last 10 years. Mr. Lucas has a style that is elegant and eloquent. The logical argument that he makes for a new type of agile organization structure is inescapable and commands any thinking person’s consent. I might add that this model applies as well for non-profits and governments with the same efficacy. It is so very refreshing to read an intelligently written blog for once instead of the normal tripe presented by the great many who pollute the internet. My compliments to the author. I am working on a book on the history of organization forms and will take the liberty of emailing you my contact information Mr. Lucas. I would appreciate the opportunity to coolaborate with you.
With the greatest of sincerity,
RAH
This is an amazing study on organization alignment and structure. I don’t know how I missed this before. Incredible view into organization dynamics. I am in awe!!!!!
Brian my friend this is good article also. I find time at last to read more of your blog. I have whole company read now. You must post more. I am loyal reader now!
Brian, Viktor would like me to ask of you if you have video of this you talk about.
You have created a very important contribution to the concepts of organizational structures. This article should be required reading in college business administration courses. It deserves a larger treatment than just an article. You should write a book on this subject. When you think and reason as well as you do, you owe it to the public to air your knowledge on a larger stage.
Well said Johann! I agree completely. Brian seems to be able to strike a nice balance between academic knowledge and practical experience. It is a shame he doesn’t blog more. I agree that he should be writing books on the subject. To me the organization structure is fundamental to success today. Even if you put good people in a bad, bloated hierarchic structure they will fail, or at least not perform optimally. I just retired after 31 years as a business consultant. Many of the problems and struggles to gain business agility are addressed by Brian’s concept of a hybrid structure. The beauty of it is that he has not sacrificed the strengths of formal operations in the enterprise nor does he leave strategic vision behind. I almost wish I were starting out again as a consultant in business!
This is a very impressive white paper on a new organization structure concept. The possibilities of running an organization in a lean fashion yet still being compliant with all the basic government regulations is highly intriguing. I hope that you follow though on some of the ideas for additional articles on this subject that you mention in the comments.
I also find this post very interesting and informative. Please write more on this subject of agile organizations.
I would second that as well. I would be very interested in any of the additions to this subject you have talked about here. I hope that you are continuing to develop this topic. It is worthy of a book.
Brian I am very impressed by your insights in this white paper. You cover a great deal of material here and pose real life solutions to the problems and stressors that plague organizations today. My question is since the hierarchic structure is there to just make the enterprise operational on a basic level can this structure facilitate more than one of the services structures?
As an independent business consultant, I think this is relevant and very informative. I am surprised this isn’t published as a purchasable item instead of served up free. Thanks for being so generous Brian.
This is a very superior piece of work and I compliment you Brian for creating it and sharing it with us. I would like to approach the question of the imperative of an agile organization structure from the reverse. At what point do you think these structures will be the most common and who will adopt them first. I expect that the smaller hi-tech businesses will be the first to act on them, but what do you think?
You make a good argument for this Brian. I wonder how many organizations are structured like this right now? Any statistics?
I would like to see any statistics that you shared with Tamera, if you are willing. It is difficult to convince my company to look at changes like this unless they see others have done this successfully.
Sign me up for your next webinar on agile organization structures!
New twist on flexible organization structures. Well thought out and expressed. Being a small business owner that came from the corporate world, I heartily recommend this for all business owners and managers!
This white paper deserves more prominence than just a blog, Mr. Lucas! Why haven’t you published this in a journal or magazine? >Eloise Kramer
Brian – I have followed your blog from the beginning and am a great admirer of your thinking about agile, particularly where it comes to organization structures. I am seriously in need of “Great” agile organization consultant for a long term engagement in Europe. Are you available or do you have a recommendation? From reading your blog, I believe Sally Rider is in this field and you have corresponded with her on this topic. If appropriate can you put her in contact with me? Alex
Brian do you have any examples or statistics of established organizations with an entrenched management structure adopting this? Somehow I can see administrative, do nothing managers buying into this. It leaves no room for them to push paper around.
I believe you are a true master of agile philosophy. Your proposed organization structure highly intriguing. It is easy to impose a flat structure on a small organization. It is difficult in a large enterprise. Your duo solution for line of authority is very elegant and simplicity itself. Your approach is one that overcomes many of the traditional problems with matrix management in a large organization. You do not show an evolutionary path to achieving this organization state in a stable fashion. Does such an evolutionary road map exist?
I agree that this concept is very efficient and divinely graceful in its design. It brings the strength of all the superior ideas and eliminates their weaknesses. The needs of administration and work is each balanced in harmony for the worker assuring they are free to perform their duties with minimum stress. This is a future state that all organizations should work towards. Please allow me to correspond with you on this subject.
Brian: I would submit that it is an intelligent structure. The result of implementing this structure would be a naturally occurring harmony. Because it operates in harmony, it would have a proclivity to preserve its status. It has structure where required and fluidity where beneficial. It would automatically adapt itself to changing patterns of employment. It would attract the workforce required to answer the dynamic needs of it market. It would re-size and reshape itself with virtual partnerships to meet the needs of specific expertise. It is natural, simple and enables everyone within it to operate at their peak efficiency. Inefficient or incapable resources would be shunted aside and gradually through attrition be removed. There is no administrative management overhead, so its operational costs are minimized. The most ingenious solutions are the ones that solve great problems completely yet simply. This answers that test. I admire your ingenuity! :Tam
This is a very important work on organization structure and needs to be recognized. More CEOs and board members should start reading your blog Brian and move into the future proactively rather that being dragged by circumstance.
This is a most powerful post. It brings the future of enterprise formation into the realm of today’s possibilities.
As an H/R Director charged with overseeing a company realignment this was exactly what I was looking for to get the big picture! Thank you Brian! If you ever write a book on this subject or do a webinar please let me know. Also do you have a recommended bibliography?
Very sound reasoning and a worthwhile read on the subject of modern organization structures.
I am a small business owner the pressure today to be lean and flexible is unrelenting. This article is the most understandable, concrete and eloquent expression of an agile organization I know of. Thank you for posting this!
Excellent analysis of the dynamics in the market place and the organizational answer to these unceasing demands! Nicely done sir!