“Design is intelligence made visible.” —Alina Wheeler
1: Columbia Business School professor Rita Gunther McGrath wanted to know the key difference between high- and low-growth large organizations.
Her research suggests two factors. Which seem to be in opposition to one another.
“On the one hand, they [high-growth large companies] are built for innovation, are good at experimentation, and can move on a dime,” she writes.
The second factor?
“On the other hand, they’re extremely stable, [the] strategy and organization structure stay consistent [and the] culture is strong and unchanging,” Rita adds.
2: McKinsey consultants Carolyn Dewar, Scott Keller, and Vikram Malhotra found a similar dynamic in their work: “Organizations that have both stable and agile elements are three times more likely to be high-performing than those that are agile but lack stable operating disciplines, and more than four times more likely to be high performing than those that are stable, but lack agile elements,” they write in their book CEO Excellence.
The best CEOs find ways to build both stability and agility into their organizations. They avoid making big shifts from one extreme to the other.
Finding strategies to promote stability and agility increases the odds from 25 to 86 percent for an organization redesign to be successful while also making team members feel “like they’ve been freed from a prison,” the authors write.
One example? At Intuit, former CEO Brad Smith gave all of his team members 10 percent unstructured time.
“We had more than 1,800 different experiments going on at any one time,” he recalls. “If you had an experiment that proved successful in the eyes of our customers, we would fund your idea for another three months.”
What were the results? “It really helped us bring down the barriers of organization design, because everyone felt empowered to push their ideas out.”
3: According to Carolyn, Scott, and Vik, the best CEOs used three primary strategies to keep their organizations agile:
“First, using ‘team of teams’ approaches that delegate authority to numerous teams that are highly empowered to work together fluidly to achieve a big objective.
“Second, creating resource pools that ‘flow to work’ based on where they can create the most value (versus being constrained by static reporting structures).
Third, applying agile methodologies: rapidly iterating products and services by launching a minimum viable product and then getting multiple rounds of customer feedback.”
Larry Culp, former CEO of Danaher and now of GE, suggests that the buzzwords are new, but the basic concepts have existed for many years.
“When you look at a two-week ‘agile sprint’ in coding,” he observes, “it doesn’t look so different than a week-long Toyota Kaizen event (gathering operators, managers, and owners of a process in one place to map, agree on, and implement improvements to the process).
“It’s all about chunking the work down, getting the right people together, trying something new, and getting something tangible done quickly.”
Adidas’s Herbert Hainer says: “Before, we’d been a tanker with ten thousand people on it. If you wanted to turn around, it took five hundred miles. Now our fleet includes speedboats.”
More tomorrow!
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Reflection: Does my organization encourage both stability and agility? Is there an idea above we can experiment with?
Action: Do it.
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