Business Agility vs. Organizational Agility: Not the Same!
I get as excited as the next person about current trends in how work is best organized in digital companies. Those trends include egalitarianism (especially of ideas), transparency of decision-making, openness to experimentation, fact orientation, servant leadership, middle managers as player-coaches, self-organizing and self-directed teams – the list goes on.
You can immerse yourself in all those trends and lead yourself to believe that business is being reinvented. In some sense yes it is, but in the most important sense, no it’s not.
The death of companies is not imminent. Top management is not going to disappear. Organizational hierarchies will continue to exist, even where flattened and energized.
What does that mean for discussion of agility? It means that if you want to pursue true business agility your thinking must be grounded in management imperatives. That is exactly the approach taken by The Business Agility Manifesto.
Put simply, management exists because the business owns assets from which value must be created. The persisting need for strategy, security and optimization all arise from that fundamental fact of life.
The need for business agility arises because the business ecosystem has never before been so dynamic, at least on the compressed timeframes we see today. Business agility is about creating a sustainable means to continuously change and adapt, while preserving, protecting and enriching business assets. Increasingly those assets include knowledge, a point the Manifesto takes as a critical point of departure.
Talking about agility only in terms of how to compact and energize organizational structures (hierarchies), while useful and exciting, fails to address the fundamental raison d’être for companies. Organizational agility is simply not comprehensive business agility. If only it were it that simple! Don’t be fooled. The problem of business agility runs far deeper than surface innovations addressing only work agility can ever resolve.
 Andrew McAfee and Eric Brynjolfsson confirm and explain this point brilliantly in chapter 13 “Are Companies Passé (Hint: No)” in Machine, Platform, Crowd (2017), W.W. Norton & Co, 402pp.
 https://busagilitymanifesto.org/ by Roger T. Burlton, Ronald G. Ross and John A. Zachman, 2017. The Management Imperatives are elaborated on https://busagilitymanifesto.org/supplements/management-imperatives.
 McAfee and Brynjolfsson use the more elegant term ‘residual rights of ownership’. Their argument (very briefly) runs like this. Since contracts with other parties will always be incomplete, companies with their managers and hierarchies will continue to exist to make decisions in all cases where the contracts fall short. In other words, even with distributed ledgers (blockchains), smart contracts, powerful platforms, and machine intelligence a completely flat (purely egalitarian) business playing field will remain unworkable.
Tags: Andrew McAfee, business agility, Business Agility Manifesto, Crowd, Eric Brynjolfsson, Machine, organizational agility, Platform, work agility