Architect your company for agility

A great strategy is valuable only if a company is capable of executing it and this depends largely on its business architecture — the way its people, processes, systems, and data interact to deliver goods and services to customers.

As companies now develop digital strategies, they are invariably promising integrated customer solutions. These strategies will be especially difficult to execute because so many organizational elements must be synchronized to deliver an integrated solution. And it’s not just the number of organizational elements that makes digital strategy execution difficult. Speed matters. To keep pace with customer demands and competitor moves, companies must be able to quickly experiment with a potential offering and, depending on customer response, continuously enrich and scale that offering, or discard it and move on to the next experiment.

In other words, business architecture just became more important — and more difficult. In the pre-digital economy, business architecture most often focused on operational efficiency — designing seamless end-to-end business processes. That is no longer sufficient. In the digital economy, business architecture must also focus on agility — designing rapid reuse of individual business components.

Organizational agility won’t happen by accident. It must be architected. Innovating at SPEED means utilizing EMPOWERED TEAMS

To facilitate speed, companies must design themselves to minimize the obstacles to getting work done. This requires empowering and supporting problem-solvers. To this end, growing numbers of companies are creating small, cross-functional, agile teams. Each team owns delivery of a digital offering or a set of services contributing to an offering. Typically, teams clarify their own objectives and define their metrics for success.

The concept of continuous release is essential to the effectiveness of empowered teams. Empowered teams experiment, and the best teams learn how to rapidly respond to the outcomes of their experiments. These teams don’t fear failure. In fact, critical to the concept of empowered teams is that when experiments fail, company managers do not assume responsibility for dictating how to fix things. Instead, they act as coaches, posing questions and eliciting hypotheses and expected outcomes.

Failed experiments are essential to learning. If an entire concept is deemed a failure, the team can be disbanded and reassigned to a new initiative. This helps to keep team formation fluid. Unlike traditional organizational structures, a design built on empowered teams is in a constant state of change.

The challenge is ensuring that the efforts of individual teams align to achieve company-wide objectives.

The MIT Center for Information Systems Research has identified three mechanisms for achieving alignment: (1) clear missions, (2) common business components, and (3) fruitful knowledge sharing.

To read the full article from MIT-Sloan, please click here.