From the Ask Tom mailbag –
Question:
You seem dig your heels in around hierarchy. Here is an article from McKinsey on agile organizations. McKinsey is a big company. I think they know what they are doing.
Response:
McKinsey is a big company and they know what they are doing, but with the absence of an understanding of levels of work. Here are their five trademarks. Today, we will work on the first.
- North star embodied across the organization.
- Network of empowered teams.
- Rapid decision making and learning cycles.
- Dynamic people model that ignites passion.
- Next generation enabling technology.
North star embodied across the organization.
This is the strategy that the organization serves. The most important function of management is context setting. This is important at every level of work, to establish the cascading contexts aligned with the overall strategic objective. There are three primary organizing documents –
- Vision statement
- Mission statement
- Business model
Vision Statements and Mission Statements
These two organizing documents set the initial context, but most are nonsense about “being the premiere provider” of something and “exceeding customer expectations.” These kinds of statements do NOT set context. They are vague and contribute to the ambiguity already present in the world.
The reason most Vision/Mission statements are vague is their attempt to position the company at some point in the future, five to ten years out (rightly so). At the five year mark, all of our tangible, concrete plans go out the window. The discussion shifts from known things to conceptual things. The problem is that most people do not think conceptually and those that do, don’t practice very often. Most feeble attempts all sound the same.
So McKinsey is correct. North Star is important. But, McKinsey and Agile do not have a corner on this market. Every company I know makes this attempt, they just don’t do it very well.
For another discussion on North Star, you might also check out Accelerate, by Suzanne Frindt. Of course, she calls it Yonder Star, instead of North Star. Same idea.
The Business Model
The business model is the first step in defining the organizational structure. The business model flows from identification of market segments, value proposition in each segment, resources required including people. Often, defining the business model provides guidance on the creation of the conceptual vision and mission statements. The most helpful resource I know is Business Model Generation. It is a very easy and explanatory method of creating your North Star documents.