Designing and implementing a new operating model is one of the biggest challenges an organisation can undertake, and increasing pressures and strategic priorities mean that results need to be achieved in a shorter and shorter timescale. Do the agile approaches that have arisen over the last few years – mainly in the development of digital products and services – provide a way of meeting these demands and creating organisations fit for the future? Or does the slow and steady ‘classic OD’ approach provide a more lasting solution that fits with larger organisations’ ways of working.
Pooling many years experience of building new organisations in the public and private sectors, a group of Comotion associates recently debated these questions and came up with a set of guiding principles that make delivery of an operating model change programme more agile than fragile. And if any of these sound familiar it’s because some well-established principles underpinning good change management apply just as much in the ‘new’ world of agile operating model as they do in other forms of delivery.
The term operating model is used to describe the processes, systems, jobs and organisation structures that deliver products and services to customers. Changing these with a classic organisation development (OD) approach usually involves a large team of people who document current and future processes in detail then build the new jobs and roles around these. The agile approach involves breaking down the organisation into more manageable – typically service-based – chunks, prioritising these into design sprints, then rolling out into the real world via proof of concepts, pilots etc. The advantage of this is that results are achieved more quickly, but may initially have more limited scope. Achieving scale and sustainable change is therefore one of the main challenges.
Leadership and sponsorship
In any large scale change, explicit sponsorship is key to success, and agile operating model development is no different. In fact, success in an agile world may mean that the team are given permission to fail – fast – and evolve successful change through further sprints. This concept may play less well when the organisation has a tradition of ‘right first time’ achieved through a more slow and steady approach to development.
Identify the potential barriers upfront
The transition from the design stage to implementation at scale is where the biggest challenges lie. Having HR on board at the outset is essential as the jobs of people who are impacted will change and the timescales to manage a large-scale change in role, skills, overall headcount will invariably be lengthy once consultation and notice periods are taken into account.
A similar warning should be issued for any required system development that doesn’t adopt the agile model: full implementation may have to wait until the waterfall approach catches up.
Business cases are necessary, but not necessarily evil
Some operating model change projects are directed by a senior sponsor’s conviction that it must be done, or that tight timescales and multiple pressures – the implications of Brexit in the public sector for example – mean that a JDI approach is required. However at some point a cost-justification will be needed and, in general, experience suggests that one large business case and budget is better than multiple cost/benefit analyses which may result in trimming away at the change where individual cases don’t meet investment return thresholds.
NewCo or OldCo? The problems of ‘hipster syndrome’
Creating a ‘NewCo’ where the new operating model can be developed and implemented separately from the existing organisation has several advantages, particularly where new products and propositions can be developed without some of the constraints of ‘OldCo’ processes and mindsets. The problem comes when the NewCo is seen as too separate – one company was cited as having created a team of Silicon Roundabout experts developing new digital products and services, with the resultant effect that the rest of the organisation viewed them as something that was very different from the existing one, potentially constraining adoption of the new operating model and approaches more widely in the organisation.
One approach that can counter what we might call ‘hipster syndrome’ is to involve regular members of the organisation in the upfront ideation and discovery phase. This increases the chances of ownership in the affected areas once the changes are implemented, although the discovery that someone has designed themselves out of a job is an issue that will need to be managed.
Agile: journey or destination?
It’s possible to use agile methods to implement a traditional organisation, although it’s often the case that the rapid implementation approaches used in developing the operating model will find their way into the new processes that the organisation implements. This is particularly likely in those parts of the business – product development for example – that would lend themselves to this iterative and discovery-based approach.
Whilst there are plenty of examples cited by Comotion associates of successful operating model design and deployment using agile approaches, it’s not a magic bullet. There is a general sense that organisational inertia, existing processes and cultural constraints can mitigate against success without paying attention to the change fundamentals outlined above.
A version of this article will also appear on Comotion‘s website.