The 10 building blocks every Agile organization needs

Agility is the means, not a target in itself.  Agile best practices are tools to achieve goals, not goals themselves. 

With the actual goals in mind, you need to create a culture of agility in the organization to meet them. But it is laborious to build that culture. 

There are hundreds of Agile processes and principles that you could try, but you can’t (and shouldn’t) try them all. 

So let’s keep it simple and highlight the absolute must-dos. In this blog post, we will outline the 10 principles, or building blocks, that will help your organization create business agility.  

Any initiative you undertake to improve your agility — processes, ways of working, or tool configurations — you should evaluate against these principles.

Here they are:

The 10 building blocks of organizational agility

1. Create an actionable vision and strategy, and empower people to achieve them
2. Create a regular cadence for decision-making at different time spans, and make the decisions transparent
3. Always state the “why” of backlog items, from the customer's perspective
4. Commit to the most important goals, not timelines
5. Work in the smallest valuable batches and ensure there is feedback on completed work at every level of product creation.
6. Empower the teams to deliver value to customers
7. Enable a continuous dialog about the product’s customer and value throughout the organization
8. Create data from the realized output of items and use the historical data stubbornly for planning.
9. Recognize and respect both your internal capabilities and external boundaries, but challenge them regularly
10. Commit to consistently making small improvements at every level. Aim to optimize and simplify.

And now let us look at each of them in turn.

1.  Create an actionable vision and strategy, and empower people to achieve them

One of the cornerstones of agility is empowering people with the most comprehensive knowledge to make decisions. These decisions must be in line with the company's vision and strategy.

The best way to achieve this is to have a competitive, well-understood, and actionable strategy. That means that the strategy actually states why and how the company will succeed.

Too many strategies fail to explain enough why the strategy will be successful, and what the underlying assumptions behind it are.

The other important part of the strategy is the identity: the game plan.

• How will you compete?
• What is your game plan to succeed?
• What are the main principles to follow, to achieve the strategic goals?

When your strategy is well put-together, it is much easier to empower people to achieve it. When you tell people “why” and “how”, you already give people clues on how to behave. 

And when this is combined with financial and resource enablement, you are empowering organizational units, teams, and people to work according to your strategy.

2. Create a regular cadence for decision-making at different time spans, and make the decisions transparent

Like any other organization, yours has a lot of “noise” that takes attention away from your strategic direction.

• New potential sales
• Market changes
• Customer needs
• Ideas for the future
• Changes in the technological or political environment

All these require decisions and can easily draw too much attention away from other decisions. So you need to manage the organization’s attention and decision-making.

Therefore, your organization should create effective circles of control, or as we call them: circles of feedback. These ensure that regular decisions are made, in line with your business and strategic targets.

These circles of feedback are equivalent to time-boxed development, where a time box limits the work in progress and ensures that the goals of the activities are achieved within that time box.

Good examples of these circles of feedback are:

• budgeting cycles
• OKR’s
• product increments
• release cycles
• demos
• sprints

Using these all around the organization helps you bring attention to the decisions, and keep the whole organization on track.

3. Always state the “why” of backlog items, from the customer's perspective

We humans will put more effort into tasks when we know the reason behind the request. This is also true with requests at the level of strategy and vision.

In our consultacy work, we use the the expression “squeeze the why”. It means anyone in the organization always has the mandate to ask for the reason behind all the requests and directions of the organization. We see this to be one of the key guidelines for every organization. People should always be entitled and encouraged to squeeze the why.

The why behind all the requests should be in the form of value. Most often, the why should come from the customer or market perspective. But sometimes the why is from a company's business perspective, such as building efficiency, effectiveness, or people's happiness.

The best why’s are the ones that can be connected to the business success of the organization.

4. Commit to the most important goals, not timelines

Sometimes, the most important goal is a timeline, but often it isn’t. Business agility is about pursuing goals rather than simply keeping timelines. For example, new features should be driven by their business goals rather than the initial timeline or plan you made earlier.

How you achieve this depends a lot on which field of business you are in. For example:

• If you are in a SaaS business, you can use an alpha-beta-commercial releasing cycle.
• In some other fields, you can achieve it by planning to create service packs soon after the initial launch, to have a way to make necessary adjustments to achieve the original goals.

Another way to illustrate how goals are more important than timelines is the perception of roadmaps.

Your roadmap should not be a list of commitments, but rather something you intend to revise as soon as you understand the current situation better. It is a living document, where most of the timelines will change.

When the timeline is an important goal, or one of the goals, then of course you need to adjust your ways of working accordingly. But when not — which is usually the case — you should concentrate your ways of working on the rapid feedback, corrective actions, and the continuous drive toward the desired goals.

5. Work in the smallest valuable batches and ensure there is feedback on completed work at every level of product creation.

One of the most important concepts in agility is the cost of delay.

Cost of delay describes the value you could potentially gain by working faster. It is has at least one of these three elements:

1. Unidentified quality problems at component, system, or product level.
2. Cognitive quality debt caused by misinterpreting customer value.
3. Unrealized business benefit due to not releasing done work to the customer.

You can lower the cost of delay by focusing on fast feedback and learning. To get fast feedback, work in the smallest valuable batches possible, and ensure you have working feedback loops from each level of the value chain.

The easiest feedback tools you could consider here, for every level of the organization are:

• Definition of Ready
• Definition of Done
• Acceptance criteria

There are also other powerful methods, to go even deeper into your product creation processes to lower the cost of delay, such as:

• DevOps ways of working
• Customer Experience feedback tools
• Proof of Concepts
• Business experimentation tools

6. Empower the teams to deliver value to customers

Empowering teams to deliver value to customers have three important aspects: empowerment, guidance, and enablement.

1. Empowerment is about giving your teams permission to release directly to customers.
2. Guidance is all about having a good strategy and common understanding of your customer's needs.
3. Enablement means creating technical capabilities to release, ensuring good technical quality and proper commercial support.

If you are in a larger organization, looking to empower teams to act, you need to build networks inside the organization that have the knowledge, ways, and empowerment to collaborate to create customer value.  For this, you need a good product organization design and a well-thought-out decision-making structure. 

For this level of agility, you need an advanced Agile culture, and once in place, you have a serious competitive advantage.

7. Enable a continuous dialog about the product’s customer and value, throughout the organization

One of the most important keys to business success, is that the whole organization understands the customer and market needs the same way. But almost always, sales, marketing, customer service, product management, and product creation have different views on customer value, customer needs, and market development.

The very best organizations can align this, and everyone drives towards the same goals.

Your organization should have a continuous discussion about customer value, customer needs, and market development. Business success is about continuous balancing of short and long-term success. This can only be achieved by having a shared view throughout the organization about the customer and market.

8. Create data from the realized output of items, and use the historical data stubbornly for planning

One of the key ideas behind Agile thinking is that people are terrible at estimating.

There are more than twenty known cognitive biases affecting estimates. Daniel Kahneman has introduced the WYSIATI model (what you see is all there is). It states that people make decisions based on the information they have available right now, not thinking about the information they don’t yet know. This and other biases always affect any human given estimates.

Taking these biases into account, the best way to plan is to rely on historical data.

Product creation, especially in the software industry, is about always creating something new. Historical product creation data is not as exact as it is in production line-type environments. But to many people’s surprise, historical data is quite accurate in planning — even in product creation. Especially when the process of creating the work items is always similar. When we slice the work items similarly, historical data starts to become meaningful.

So for planning purposes: stubbornly use historical data.

If your historical data shows that your capability to deliver is at a certain level, without making major changes in the processes or resources, the capability to deliver does not change.

In all estimates and plans, such as roadmaps and time-boxed development cycles (for example sprint and planning increments), base your plan on historical data. That will improve the plan's reliability and mandate to make difficult prioritization decisions earlier.

9. Recognize and respect both your internal capabilities and external boundaries, but challenge them regularly

One of the things we’ve seen with organizations is that they are benchmarking their ways of working. They are taking ideas from totally different types of cultures and companies, in different life cycles.

For example, if you are a startup, without an extensive existing customer base or delivery and support organization, the reality is totally different from a hundred-year company with a massive customer base.

Your field of business likely defines your organization’s boundaries. Working in the medical or finance industries are very different from working with mobile games.

Take these external boundaries into account, but of course, don’t be too limited by them. We’ve seen some medical industry companies being very Agile in their ways of working, and some consumer business companies being very stagnant in theirs.

A third aspect related to this is the internal capabilities:

• Technological and business architecture
• Product organization design
• Tools and practices
• The financial structure of the company

It is impossible to take an external idea, such as an Agile framework, and implement it on top of current internal capabilities without thoroughly thinking through how these fit together.

You can only build organizational agility by understanding internal capabilities and external boundaries — and then building business agility respecting those. But understand that these capabilities and boundaries are not always written in stone, so make sure you challenge them regularly. Some of them can be changed. Respecting the boundaries and challenging them regularly are keys to building a model that suits your organization.

10. Commit to consistently making small improvements at every level. Aim to optimize and simplify.

Creating a competitive edge through business agility a never-ending pursuit. If you stand still even for a short period of time, the competition will outrun you.

Agility is about continuous improvement. Sometimes you need a larger transformation, to take a larger leap in business agility, but most of the work you do continuously, with small improvement at every level.

Everyone knows how to make things complex. Human nature is about creating complexity. Every time something goes wrong, the initial idea is to add a process step or quality gate to ensure it won’t happen again. This is the easiest way to build slow, unresponsive, and non-competitive organizations.  

So always aim to simplify. Every day, every week, every month … something from the processes, some meeting, or something at the end of its journey’s life should go away.

The concept of waste, which we get from lean thinking, is important to understand in the context of product creation. There is always waste. So your organizations needs to keep a close eye on what is valuable, and continuously aim to simplify the value creation.

There are great Agile tools for simplifying and continuously improving, such as retrospectives and small experiments. Through continuous experimentation on ways of working and an open mind to try new things, you can achieve simpler, more fluent value creation.

A word of caution here, though: Don’t always add on top of the existing. Also always remember to try to remove things.

How to benefit from these 10 building blocks

As statistician George Box stated: “All models are wrong, but some are useful”. This also applies to our list. Our list of 10 building blocks is not comprehensive or perfect.

It reflects our current knowledge and learnings from dozens of organizations we helped build agility into their culture. Consider each of them, rather than try to perfect the list. There are certainly many other essential building blocks to think of, but we’ve selected these for a reason.

These building blocks create the foundation for building business agility. For example, we could have written them in a playbook format, describing the organization's specific way to address the principles. But by thinking them through and explaining them, we’re helping organizations everywhere take a step toward creating a culture that supports agility. They will increase people’s motivation and affect the value creation flow of their organizations.

This blog continues a series of blogs about transforming organizations toward true and lasting agility. Read the previous blog from the series: Understand why your organization wants to be Agile: The driving forces of agility