Agile Strategy Execution
A Requirement of Lean Organization
From the 1970’s I was involved in creating team-based organizations, enabling self-directed teams. We soon learned that this required designing the whole-system (social systems, technical systems and the economic system) to be internally aligned and to be adaptive to the external environment.We call this Whole-System Architecture (WSA). It is designed to create unity of purpose, a unified understanding of values; alignment of systems and structure; and, alignment to strategy. Because it must adapt rapidly to changes, it is Agile Strategy Execution.
How you change is the change, and a key to sustainable change is the high engagement of the people who do the work at every level. It is a change methodology of co-creation, creating and designing the house in which you live.
The human body is a whole-system with sub-systems (nervous system, digestive, cardiovascular system, etc.) These systems are inter-dependent and the failure of one can result in the failure of the entire system. Similarly, every organization is a whole-system comprised of subsystems such as the information systems, the organization structure, decision-making systems, hiring, training, motivation and others. The degree to which these systems are aligned with each other, and aligned to the requirements of the external environment, the organization will succeed. Unfortunately, most organizations do not have a process to create this alignment.
I recommend these two articles for a more in-depth explanation of WSA.
Lean management, or Toyota Production System, is a whole-system. Most efforts to implement lean focus on some subsystems and not others. They often fail because of this failure to create alignment. For example, if you want employees to engage in continuous improvement they must be organized into teams that know their process. This requires knowledge of performance, information flow to the team. For a team to function well, they must have training and coaching to develop their capacity to solve problems. If they are to sustain improvement efforts there must be some system of motivation to encourage their efforts. Each of these are sub-systems that must be designed as a whole-system.
There are many ways to illustrate the whole-system of an organization. One is to recognize that there are numerous external forces acting on the organization. The ability to adapt and change is a requirement because of changes in the external forces. These include technology, customer preferences, the economy, etc. What is within an organization can be divided into its technical systems (core work process, equipment, technology), the supporting social systems (structure, skills, communication, motivation, etc.), and the economic system (all the financial inputs and outputs).
Agile Strategy Execution
The essence of strategy is recognizing threats and opportunities presented by the external environment and then responding to those in a way that aligns the organizational capabilities and culture to meet those challenges. In other words, if the future of marketing our products is going to be through the Internet and social media, with single day response and delivery to customers, virtually every system in the organization needs to aligned to achieve success in that system. You have to intentionally design that system. The old system will likely not have that capability. Continuous improvement will not get you there. Intentional redesign will.
Most strategic planning is focused on creating externally facing strategy. In other words, what does the market want? What are the financial requirements to meet the needs of shareholders? What market position are we trying to achieve? These are all important questions. But, they do not address the internal capability of the organization to perform. If our strategy calls upon us to meet the needs of a new market or employ new technologies, there is a need to develop new internal capabilities. Strategy execution, according to the Conference Board, is the number one problem faced by CEO’s of major corporations. They report that most strategy execution either fails or falls short. Why? Because of the failure to create the internal capabilities that enable an organization to execute strategy. This is why I developed my course on Business Strategy Execution. And, this is why a whole-system approach is required to achieve successful strategy execution.
It is recommended that this process be an “inter-active” planning process with an executive steering team who gives the process direction and authority; and design teams comprised of members of the organization who are responsible for the following four stages of Discovery, Dream, Design and Development. These two lead groups will seek ways to involve as many as possible in the organization to gain the broadest possible engagement.
Principles of Whole-System Architecture
The following principles underlie the Whole-System Architecture methodology.
- The organization is a complex system that requires alignment of its parts to the same goals and purpose.
- Design the organization as an open-system that adapts to its environment and aligns with the requirements of its environment.
- The design should optimize the opportunity for its members to work as natural work teams, to learn from each other, and achieve the intrinsic satisfaction that can be derived from enriching jobs.
- The organization design should be done by the “world’s greatest experts” and those who design should implement that which they have designed. Enlarge the circle of involvement as you implement but do not lose the understanding of those who did the analysis and design of the new system.
- Shared principles create unity of systems, processes, and people and must be applied at all levels and across all functions.
- How you change is the change. The process used for designing the organization should be compatible with how the organization will function in the future.
- Design for variance control at the point closest to the origin of deviation. Immediate feedback loops enable immediate improvement or solving problems that create variances. Design in feedback loops to minimize wasteful errors.
- The purpose of the organization is to meet the needs of its customers. Involve the customer and focus on meeting customer requirements.
- Appreciation and understanding of human needs and values should be reflected in the design. Design for the growth of human potential including expanded multi-skilled work, job rotation, load-leveling and expanded decision-making.
- Expect an imperfect design, with no fear of failure, but opportunity for learning and continuous improvement.
- Design to an ideal or future state beyond your “village.” Every company and every industry is a village or tribe that assumes the norms within. Look outside and beyond for models of excellence.
- Engage in appreciate inquiry to find centers of excellence within your organization and incorporate those lessons.
- All complex living systems contain processes of self-organization. Allow for and promote self-organizing processes within the design.
The course was very informative. I really appreciated the pace of the course, and the simplicity of the explanations provided. Please continue to provide us with the PDF resources as you have done for this one, they are extremely useful. Thank you! Deeksha Asiwal
Course was interesting. i love the detailed step by step / hand-holding. It was a course that walked you through what to do, how to do it, who to do what and all. I’m recommending this to other members of my management. Titilope Adelaja
Fantastic course, for anyone in strategy execution, business transformation or simply interested in improving performance of their unit. Philip Stefanov
I was looking for gain knowledge in execution strategies and this course has fulfill the knowledge gab between external and internal strategies. I recommend if you are looking for substantial knowledge. Hamlet Reynoso Vanderhorst