The world is volatile and complex. Large organisations face an urgent challenge: prioritizing the realization of an organization that holds its own in an increasingly complex world. Because outdated ways of working, sometimes disguised as modern frameworks, are failing. It is time to adapt business structures to the fast-paced, unpredictable market dynamics and start developing truly customer-centric products.

Today’s world is VUCA: full of Volatility, Uncertainty, Complexity and Ambiguity. Fluctuations in the market lead to unpredictable fluctuations, which creates inventory problems and makes capacity planning challenging. Rapid changes, for example in laws and regulations, force you to adjust your business model without having a clear understanding of the long-term implications. Globalization makes your operations and supply chains complex. And rapid technological developments, such as AI and blockchain, are challenging traditional business models, forcing you to adapt to stay relevant.

Your playing field is complex

Once an organisation reaches a certain size and has intensive interactions with the outside world, it operates in a complex environment. In this environment, the outcomes of actions are often unpredictable and the relationship between cause and effect becomes clear only after the fact. This makes it difficult to plan and implement change processes because there are no unambiguous solutions to the problems that arise.

The complex domain is highly dynamic and interactions are rich and unpredictable. Different people operate at different levels and everyone sees only a small part of the system from their own perspective. Because systems and processes process feedback and information from many directions, they are nonlinear and unpredictable.

Systems in the complex domain have emergent characteristics. That is, the sum of the parts responds differently to circumstances than the individual parts. Like neurons can form a thought process only in interaction, and like water molecules, if only enough of them come together, suddenly form a river or sea. In this kind of system, small changes can have great impact because there are always unknown interactions. The same action will produce a different result each time.

Although most large organisations have complex characteristics, they are often still set up for a high degree of predictability. And many management teams therefore predict the results of their steering actions, with great confidence, as much as 5 years into the future. This can be misleading, however, because the inherent complexity of the systems means that predictions are often inaccurate and unreliable.

It’s not a project, it’s not a program

These types of organisations use starting a project or program as the default response to almost any challenge. They are used to working and producing according to tightly defined processes with predictable outcomes, having spent the vast majority of their existence working in a predictable market with a low rate of innovation. Their organisational structure and design are focused on cost efficiency. New projects follow a structured approach to delivering value to customers. And that can go well for a long time. Until something unexpected happens. A technological or cultural change, such as the emergence of the Internet or, more recently, the AI revolution, can suddenly bring complexity into the business.

And then what does such an organisation do? They embark on a large-scale program to address the change. They deploy different teams and areas of expertise and work through the schedule step by step, hoping to get a handle on their challenge. Because this is how people work, when they are trained to operate in a predictable environment. But months later, they haven’t made any progress.

Overhead and unclear strategy make it difficult to move quickly, the rigid approach to projects makes the company inflexible, and responding quickly to new trends and opportunities is difficult. Moreover, many employees are reluctant, so new strategies and methods do not land on the shop floor. Recruiting and retaining innovative talent is also difficult for such an organisation, compounding the problems.

As a result, project turnaround times get completely out of hand. The developers at such an organisation can certainly build a proof of concept or launch an app, that’s not the problem. The problem is in the lead-up to each new phase of the project. Getting the right expertise together, getting agreement on schedules and budgets, meetings, consultations, lobbying: it all takes time and energy. Which is thus not spent on developing new knowledge or innovations.

Meanwhile, the competition does not sit still and the pressure increases. Agile startups and tech giants do embrace innovation and are becoming an increasing threat to organisations with outdated products and services.

That’s where the agile coaches come in

Anyway, we had a solution for that, didn’t we? Because the classic waterfall and project-based approach has long been in a bad light. And the successor has also been around for a long time: agile. Because if agility is what you’re looking for, all you have to do is choose an agile model, implement it and you’re ready for the uncertain future. At least, that’s what the consulting world tells you.

You can now choose from a myriad of agile models to implement in your organisation, from Spotify to SAFe and from Scrum@Scale to LeSS. And there are also plenty of expensive consultants and coaches willing to come and implement them for you. But it will never work. For two reasons:

1. You are steering the wrong part of your organisation

An organisation is like an iceberg: the part with the greatest weight is hidden from view. The visible tip, those are the formal structures and working models. Job titles, hierarchy and defined responsibilities. But anyone who has ever worked in a large company knows that the informal, invisible side has much more influence. The social relationships, the ingrained patterns, the traditions, taboos, beliefs and stereotypes. By rolling out a new organisational framework, you try to steer the whole iceberg by moving the top. And so you get no movement in it.

2. An organisation instinctively defends the status quo

Why doesn’t the bottom of the iceberg move with the top? Organisational expert Craig Larman summed that up in Larman’s Laws of Organisational Behavior. In a nutshell, those laws, which are really more observations, boil down to this: all organisations are implicitly built to maintain the status quo. Therefore, they adopt the terminology but not the underlying concepts of change. For example, project managers become product owners in name only, but continue to write quarterly schedules and weekly reports.

One reflex you always see in this is the demand that a framework be “adapted to circumstances.” Anyone opposed to this is dismissed as a “purist”. The space thus created is used primarily to secure the position of managers and to maintain the hierarchical, rigid decision-making structure.

This creates two parallel worlds: the terminology used and the actual way of working no longer correspond. With which the organisational change has failed.

Strategic Adaptable Organisations and Business Agility

In a sixth law, Larman states that in large, established companies, culture follows structure, as we saw above. Small, start-up companies have the advantage that their structure can still conform to their culture. That gives them an edge in responding to innovation and change and dealing with complexity.

Large companies can only catch up if they start changes at the structure, coupled with a clear strategy and a sharp focus on developing customer-focused products. That, then, is the basis of what we at Rapid Circle call Business Agility: building agile organisations, in a consulting model that doesn’t revolve around writing reports and charging for hours, but on long-term and intimate collaboration. That’s the only way to make volatility, uncertainty, complexity and ambiguity a part of the way you work.

You can find more explanation of Business Agility in the article Business Agility: beat the road to an adaptive organisation. How to start working on Business Agility and building a Fast Flow Organisation can be read in Towards an Agile Organisation: take the first step now.