How to Win a Race Toward Organizational Agility (Avoiding the Ferrari in a Traffic Jam Phenomenon)

This article is inspired by a post by Celina Kostmann and a post by Dorota Mleczko .

Imagine owning a Ferrari—an emblem of speed, precision, and power. However, what if you attempted to drive it through a bustling city center at rush hour?

Despite the Ferrari’s incredible capabilities, the congested streets limit its potential. This scenario is a fitting metaphor for what happens when high-performing teams are trapped in an environment that doesn’t support their capabilities.

No matter how talented or motivated your teams individually are, their performance will be constrained by the conditions in which they operate.

And it can get only worse with the number of teams...

Driving Along Both Axes of Org Topologies

Improving teams to make them faster is not enough. It will likely create a “Ferrari in a traffic jam” effect, underscores a critical insight: it’s not enough to have high-performing teams. For these teams to truly excel, the environment in which they operate must be optimized.

This is where the principles of Org Topologies™ 🗺️ 🚀 come into play. They provide a framework to help organizations create the conditions that allow teams to unleash their full potential.

Org Topologies™ is a framework that helps organizations achieve thoughtful design and sustainable transformation. Central to Org Topologies are two key axes that guide organizational design: Scope of Capabilities and Scope of Work.

1. Scope of Capabilities: This axis defines the breadth and depth of teams' skills, knowledge, and expertise. It encompasses the ability to drive fast, adapt to new challenges, innovate, and continuously improve.

2. Scope of Work: This axis refers to the range and complexity of tasks and responsibilities assigned to teams. It includes the volume of work, the diversity of tasks, and the level of interdependence required to achieve organizational goals.

By understanding where a team or organization falls on these axes, leaders can make informed decisions about how to structure teams, allocate resources, and drive change.

The Two Waves of Organizational Transformation

To fully grasp how Org Topologies can drive real organizational change, it’s essential to understand the concept of the Two Waves of Organizational Transformation. These waves represent the evolution of organizational design over time, from early-stage agility to a mature, scalable model.

First Wave: Achieving Team-Level Agility

The first wave of transformation focuses on achieving agility at a smaller scale, often within individual teams or departments. This stage is characterized by:

• Formation of Agile Teams: Small, cross-functional teams are formed to work on specific projects or products. These teams are designed to be autonomous, with the flexibility to make decisions and adapt to changing conditions.
• Pilot Projects and Early Wins: Organizations often start with pilot projects to test the effectiveness of new ways of working. These early wins help build momentum and demonstrate the value of agility.
• Initial Scaling Challenges: As organizations attempt to scale agility beyond individual teams, they begin to encounter challenges related to coordination, dependencies, and maintaining alignment across the organization.

The problem with the first Agile wave often lies in its limited scope and the challenges that arise when trying to scale beyond individual teams. While the first Agile wave typically brings about significant improvements in team-level agility and productivity, it often encounters several key issues:

1. Local Optimization vs. Systemic Improvement

Local Success, Global Failure: The first Agile wave often focuses on optimizing individual teams, leading to pockets of success. However, these improvements are not always aligned with the broader organizational goals. This can result in local optimizations that do not translate into overall organizational effectiveness.

2. Siloed Agility

Isolation of Agile Teams: Agile teams may become isolated from the rest of the organization. While these teams may operate effectively within their own boundaries, the lack of coordination with other teams or departments can lead to bottlenecks, miscommunication, and delays in delivering larger, cross-functional initiatives.

3. Challenges in Scaling

Difficulties in Expanding Agility: As organizations attempt to scale Agile practices beyond individual teams, they often encounter difficulties. The methods and practices that work well for small teams do not always scale effectively across larger, more complex organizations. This can lead to inconsistencies in Agile adoption and the dilution of Agile principles.

4. Dependency Management

Increased Inter-Team Dependencies: As Agile practices spread across the organization, managing dependencies between teams becomes more challenging. Without proper coordination mechanisms, these dependencies can slow down overall progress and lead to delays, undermining the benefits of Agile.

5. Lack of Systemic Change

Superficial Implementation: The first Agile wave often results in superficial changes, where teams adopt Agile rituals and processes without making deeper, systemic changes to organizational structure, culture, or leadership. This can lead to “Agile in name only” scenarios, where the true potential of Agile is not realized.

6. Cultural Resistance

Resistance to Change: The first wave of Agile adoption can face significant resistance from parts of the organization that are more comfortable with traditional ways of working. This resistance can manifest as a reluctance to fully embrace Agile principles, leading to half-hearted implementations that fail to deliver the expected benefits.

Drive the Second Wave: Sustaining Business Agility

The second wave of transformation is about scaling agility across the entire organization and sustaining it over the long term. This stage involves:

• Scaling Across the Organization: Organizations move from isolated agile teams to a broader implementation across multiple teams, departments, and even geographies. This requires changes to organizational structure, processes, and culture.
• Building a Supportive Ecosystem: To sustain agility, organizations must create an environment that supports continuous improvement, innovation, and adaptability. This includes investing in the right technology, leadership, and organizational design.
• Overcoming Structural and Cultural Barriers: As organizations scale agility, they often encounter resistance from existing structures and cultural norms. Overcoming these barriers is critical to achieving long-term success.

The second wave of Agile represents a significant shift from the initial focus on individual teams to a broader, more integrated approach that aims to embed agility across the entire organization. This wave addresses many of the limitations and challenges encountered during the first wave and seeks to create a more sustainable, scalable, and holistic Agile transformation. Here’s a closer look at the key aspects of the second wave of Agile:

1. Scaling Agile Across the Organization

Beyond Teams to the Whole Organization: The second wave is characterized by the extension of Agile practices from individual teams to the entire organization. This involves applying Agile principles at multiple levels, including departments, business units, and even at the enterprise level. The focus is on creating a unified approach that ensures all parts of the organization are aligned and working towards common goals.

2. Building a Supportive Ecosystem

Creating the Right Environment: The second wave emphasizes the importance of building an ecosystem that supports Agile practices. This includes investing in technology, developing new processes, and cultivating a culture that embraces continuous improvement, collaboration, and innovation.

3. Integrating Agile with Business Strategy

Alignment with Strategic Objectives: In the second wave, Agile is no longer just a methodology for software development or IT teams; it becomes a core component of the organization’s overall strategy. This involves aligning Agile initiatives with broader business goals, ensuring that Agile practices contribute directly to the organization’s competitive advantage and long-term success.

The concept of business agility emerges strongly in the second wave, focusing on the organization’s ability to respond quickly to market changes, customer demands, and emerging opportunities. Business agility goes beyond Agile practices and involves the entire organization in adopting a mindset of flexibility, innovation, and responsiveness.

4. Leadership and Organizational Culture

Transformative Leadership: The second wave requires a shift in leadership styles. Leaders must move from traditional command-and-control approaches to more empowering, servant leadership models. They must focus on removing obstacles, fostering a culture of trust and collaboration, and enabling teams to take ownership of their work.

Achieving lasting Agile transformation requires a deep cultural shift. The second wave involves promoting a culture that values experimentation, learning from failure, and continuous improvement. It also requires addressing resistance to change, ensuring that Agile values and principles are genuinely embraced across the organization.

5. Addressing Structural and Process Challenges

Redesigning Organizational Structures: To support the scaling of Agile, organizations often need to rethink their traditional structures. This could involve reducing hierarchies, decentralizing decision-making, and creating networks of teams that are empowered to operate with a high degree of autonomy while staying aligned with overall business goals.

6. Sustaining Agility Over Time

Continuous Improvement: A key aspect of the second wave is the focus on sustaining agility over time. This involves embedding continuous improvement practices into the fabric of the organization. Regular retrospectives, feedback loops, and a commitment to refining processes ensure that Agile practices evolve and adapt to meet new challenges.

The second wave of Agile is not a one-time transformation but a long-term commitment. Organizations must be prepared to continuously invest in their Agile capabilities, from ongoing training and development to refining their approach as the market and technology landscape changes.

Applying Org Topologies: Optimizing the Environment

To succeed in the second wave, organizations must be willing to undergo deep, systemic change. This involves not only adopting new processes and structures but also fundamentally rethinking how they approach leadership, culture, and business strategy. By embracing the principles of Org Topologies and committing to continuous improvement, organizations can unlock the full potential of Agile and drive real, lasting change.

To unlock the full potential of high-performing teams, organizations must optimize the environment in which these teams operate. We are collecting a set of guides and practices to help leaders optimize their teams' environment that we call Elevating Structures™.

Learn more:

• Elevate Product Management to Drive Business Agility
• Elevate Scrum!
• Avoid Premature Platformization
• Elevate a SAFe Adoption with Team of Teams and eARTs
• Aligned Autonomy at Scale