Appendix B: Definitions of Operating Model Components – Doing Agile Right

 

Appendix B

DEFINITIONS OF OPERATING MODEL COMPONENTS

  • Purpose and values:  An agile enterprise’s purpose is its enduring mission to make an impact; its values express the shared, long-lasting beliefs that guide the agile enterprise’s decisions and priorities.
  • Strategy:  An agile enterprise strategy defines the organization’s sources of value, where to play, how to win, and the capabilities required to achieve its enduring purpose.
  • Leadership and culture:  In agile enterprises, leaders and the broader organization alike embrace agile values to visibly shift their ways of working to be more customer obsessed, collaborative, and comfortable with adaptation.
    • –  Leadership:  Leadership mindsets and behaviors shift to trusting and coaching instead of predicting and controlling, and senior executives collaborate as an agile strategy team.
    • –  Culture:  Agile values are embedded throughout the organization through peoples’ mindsets, behaviors, and routines, creating a culture of collaboration and innovation.
  • Planning, budgeting, and reviewing:  Agile enterprises use a more frequent, more flexible management system to dynamically focus resources on the most valuable opportunities. The cycle starts with defining strategic priorities; supporting those priorities with people and dollars; and then measuring the results of the priorities based on financial, customer, and employee impact. Results metrics feed back into strategic prioritization to inform where to continue, pivot, or stop work.
    • –  Planning:  In a dynamic process, agile enterprises create hypotheses of the most valuable opportunities for the organization to test and determine when and how best to pursue them.
    • –  Budgeting:  Agile enterprises use a frequent, flexible, venture capital–style approach to funding strategic priorities: testing, learning, and reallocating dollars to where they can have the most impact.
    • –  Reviewing:  Agile enterprises create feedback loops and have candid performance dialogues. They use simple, transparent metrics and cascade them through the organization to track actual versus expected performance and to adapt approaches.
  • Structure and accountabilities:  Structure and accountabilities in the agile enterprise reflect both the boundaries and roles of business units and the more granular view of team composition and individual decision rights.
    • –  Organizational units:  An agile enterprise aligns its business units to the sources of value in the organization, and it defines clear ownership across the matrix of business units, functions, and the center.
    • –  Teams and jobs:  Agile enterprises map the work that needs to be done to meet customer needs and deploy dedicated cross-functional agile teams to change the business. Agile enterprises create jobs that empower individuals with defined decision rights to make rapid progress.
  • Talent engine:  An agile enterprise’s talent engine defines both what talent is needed—the capabilities and skills required to support strategic priorities—and how the talent strategy will be achieved with a fast-moving, performance-driven talent system.
    • –  Talent strategy:  Agile enterprises establish multiyear people priorities for how to hire and retain the best. The talent strategy defines the skills and competencies required to achieve business goals and the balance of internal and external sourcing that will best drive results.
    • –  Talent system:  Agile enterprises use performance-driven processes for determining how to acquire, deploy, assess, develop, reward, and inspire talent, and continuously improve the systems and approaches to people management.
  • Business processes:  Agile enterprises use business processes as enablers to deliver great customer solutions. Business processes are simple and are constantly improving. They integrate individuals, teams, data, and technology to deliver disruptive innovation or repeatability where needed, across functions.
  • Technology and data:  Technology and data in an agile enterprise include the hardwiring of modular architecture, continuous delivery processes, and data quality, as well as the soft wiring of capabilities and ways of working to enable rapid decision making and collaboration across business and technology.
    • –  Technology:  Agile enterprises embrace modular, flexible, and service-oriented architectures with effective DevOps and automation to enable continuous delivery, and tools and ways of working to support effective collaboration.
    • –  Data:  Agile enterprises create and capture high-value data to improve the speed, quality, and cost of making decisions. They also establish modern architectures to provide access to data.