In this article, I would like to explain my experiment with an ambidextrous organization and governance model, which has the ambition to embody two souls of exploration and exploitation in the same body even in the most reliability-driven organizations. Before continuing to this article, I recommend you read the articles in OrgAnarchist section in order to better understand what I would like to attain with this experiment.
The Organization as 4 Playgrounds
Imagine that, you are head of a functionally structured traditional organization. As a first step of the transition to the new operating model, think that you are asked to clarify your customers and your defined offerings for these customers.
- What is your organization’s purpose in regard to your customers?
- What are you delivering (which offerings) to whom (which customers)?
- Which offerings are better to deliver centrally, in a one-fit-all approach? Delivery of which of them needs to be customized?
Then you are asked to forget the existing functional structure and imagine your organization as 4 different play grounds:
- 2 playgrounds, one for delivery and the other for renewal:
- Value creation (VC) hub, which includes jobs about delivering well defined offerings in a reliable way to your customers.
- Value innovation (VI) hub, which includes jobs for creating new value for your customers.
- 2 playgrounds for supporting and enabling ambidexterity:
- Capability building (CB) hub, which includes jobs to improve alignment, development and excellence of the organization within a certain set of critical domains (processes, products or expertise areas).
- And finally, communal work (CW) hub, which includes a limited number of jobs that is better to be done collectively by invoking collective understanding, wisdom and action.
You can consider these 4 hubs as playgrounds in which rules and expectations differ from each other. In every hub, the game is different, the roles are different, and the team members are expected to change hubs and shift between different roles time to time as needed. Lets go in to the details of the hubs…
In the value creation hub, you have fixed teams responsible for delivering your defined offerings. Teams contain fixed roles, however none of these roles are occupied by someone for full time. Keeping a fixed structure and fixed staff for defined offerings ease lives of the customers, make controlling easier, enforces consistency and reliability. Leaders of the teams are only accountable for customer experience They focus on the priorities of the customers of the existing offerings and ensure that a full and satisfying customer experience is delivered.
The value innovation hub is where the agile setup lives. In this hub there are temporary teams, which are established based on competency requirements of the jobs to be done and staffed with people who also has part time VC jobs. The people, who are engaged into a VI job, work on that job during a reserved period. The people remaining in the VC hub ensures that their colleagues maintain their focus on VI jobs during this period. VI teams are structured and operate like Scrum teams. They have a product owner and a coach.
Capability hub contains a group of experts, who realize their mission in this hub on part time basis. They are the most knowledgeable people in their respective domains. They run ahead of others, accumulate subject matter expertise and provide this expertise to others in a variety of ways in order to increase level of multi-skilling in the organization as much as possible. They set minimum requirements and alignment mechanisms for both value creation and value innovation efforts.
Communal hub contains the large team or committees. For the sake of speed and efficiency, it is important to include into this hub only the jobs, where the value of involving more perspectives beats up the extra effort and efficiency loss to do so.
- The first collective job that needs to be done in this hub is scouting, identifying and evaluating new opportunities. Everybody sees and experiences different parts of the elephant and can bring in different and valuable perspectives.
- Another collective job is staffing the hubs of capability and value innovation.
- The third one is adjusting governance (structure, roles, policies…etc). Problems that people sense can be a sign of how the organization could evolve.
- The forth one is performance review. Evaluating performance and giving feedback should be di-directional and collective.
- Communicate Intend of Ambidexterity: Set and explicitly communicate a compelling strategic intent that intellectually justifies the importance of both VC and VI for the unit
- Solidify the Intend: Ensure that targeted key results are set to be achieved in VC and VI domains in the short term, and proper motivation mechanisms are defined.
- Orchestrate the Trade-offs: Keep an eye on this bias that the unit can develop for VC jobs due to their more tangible and immediate benefits. Ensure simultaneous pursuit of VC and VI.
Capability Building Team
- Set Vision of Excellence: As the leader of related competency domain, make definition of the competency, continuously develop him/herself, set vision of excellence based on customer needs
- Build Competence: Recruit new members for his/her hub in line with the need in short & long term. Provide support (training, coaching etc) for their development, evaluate their competency level, and monitor development progress, audit their quality of delivery
- Set Standards: Define “delivery standards” for defined offerings. Define key performance metrics and monitor progress. Prepare “Definition of Done (DoD)” for VI initiatives by taking contribution of others.
- Align Delivery: Develop mechanisms for aligning efforts of different VC teams and ensure compliance to standards.
Value Creation Team
- Set Vision of Customer Experience: As the leader of delivery for related customer segment, collect insight about existing experience and unmet needs of customers, set vision of experience to be delivered to customers.
- Exploit: Utilize “defined offerings” and existing resources in order to create maximum value and best experience for the customers. Continuously check customer experience and value.
- Feed Innovation: Bring proposals to create more value and improve experience
Value Innovation Team
- Identify customer needs: Collect insight about the challenge to be addressed and uncover important customer needs.
- Clarify goals: Identify goals to be achieved within the perimeter of the challenge to be addressed by communicating with stakeholders including customers.
- Develop solutions: Develop a solution vision that can best fulfill customer needs. Find solution alternatives, test and identify best viable, feasible and desirable solution.
- Implement / deploy: Realize the desired solution in collaboration with VC teams.
CB Hub Coordinator
- Align Leads: Setup mechanisms to ensure that all capability leads work in alignment.
VI Hub Coordinator
- Oversee VI Targets: Maintain and monitor VI targets for the entire unit.
- Facilitate VI Jobs: Maintain VI job portfolio. Setup mechanisms to ensure that VI teams are properly staffed and work in line with the agile principles.
CW Hub Coordinator
- Facilitate Gatherings: Facilitate meetings, record decisions and follow up decided actions.
First thing to do is to check the resource availability. You can assume that the team will spent %5 of their time in the communal hub and roughly 10-20% in the capability hub. So the remaining 75-85% must accommodate the jobs in both VC and VI hub. In order to understand if resources are sufficient, calculate the approximate workload in the VC hub. On day by day basis, the workload in hubs may fluctuate considerably; therefore it is better to do the calculation for a longer horizon (ie: a year) If the workload in VC hub is not higher than 70%, it is OK to go.
Segregation of Roles and People
In traditional organizations, both roles and people occupying these roles are relatively stable. Most of the time there is a one-to-one relationship between roles and people, which creates people fused with their roles. In order to be agile, it is better to let people assume multiple roles and change roles frequently.
Therefore the second task in this quest is to match roles and people by ensuring that no role is occupied by someone for full-time. Everybody must have the time to operate in VC, VI and communal hub. Some matching can be done by the unit head and some can be done by a more democratic election process. In my case, I prefered to assign hub leaders and VC hub members and run an election processes for capability leads. However, I believe all role assignments must be open to competition, and I am planning to do so in the next review.
Some jobs can better be done solo. For some, establishing a team is unavoidable. Decentralizing power and getting the work done through autonomous people or teams increases speed, flexibility and efficiency. It also presents good opportunities for team members to develop themselves. Autonomy requires boundaries. Defining accountabilities and constraints makes authority explicit. Constraints must guarantee that autonomy at sub-scale must not harm the purpose at overall scale. Ensure that answering the “what?”, “how much?”, “when?” and “who?” questions remain under the responsibility of the teams or role owners. The “how?” question need to be addressed by capability leads and governance process. Unit head or the higher level of management must set the overall direction and priorities for the teams. In this new setup, every role/team has the authority to take any action to realize its purpose as long as these constraints are respected and the domain of other role’s/teams’s are not violated.
Leadership (Segregated, Dynamic, Servant)
Traditional manager role is good fit for fixed structures operating with certain level of stability; however it is a big handicap for agility. Wisdom is contingent on the issue at hand, therefore organizations need to flexibly match minds to problems. Instead of single and fixed leadership roles, it is better to institute multiple dynamic hierarchies where who is in charge depends on the problem being addressed. Therefore, after delegating some part of the traditional manager role to the teams or processes, it is still necessary to disaggregate remaining leadership functions and create multiple and parallel leadership roles. Apart from the unit head role, this model includes 3 leadership roles:
- Directing how to evolve capabilities (Capability leads): help develop people and capabilities, set standards for how work is done, drive functional excellence,
- Directing how to evolve customer experience (CX leads): set priorities while exploiting, help the delivery team to deliver a full and satisfying customer experience with the existing offerings
- Directing how to evolve products (Product Owners): set priorities while exploring, help the development team to create a valuable product
Performance & Development
The best way of managing targets in an agile setup is using OKR model. In order to comply with the the principal of collective accountability and ownership, OKRs must be set at team level. In VC and CB hubs, OKRs can be set on quarterly basis. In VI hub, each innovation initiative must have its own OKR.
Additionally, individuals must be encouraged to take personal development OKRs. People should be the primary responsible for their own development. All leads must provide feedback and support. No one should be allowed to assume a role or do a critical task without possessing required critical competencies. A kind of certification process must be instituted for each critical competency by the related CB lead. Number of certified resources on any specific competency must be aligned with the short & long term needs of the organization.
Performance evaluation must be frequent (ie: biweekly in VI hub, monthly in other hubs). The “product review” and “retrospective” mechanisms explained in Scrum provides a good example for evaluating performance and giving feedback in a collective and multi-directional manner.