Building the Elastic Organisation

Let’s not fool ourselves, leading a business in today’s world is highly complex. The rate of change is exponential and this will more than likely only speed up. The world we operate in is complex with known unknowns as well as unknown unknowns. We are still extricating ourselves from the COVID-19 pandemic and now we are dealing with Russian invasion of Ukraine which is having an impact globally e.g. the price of fuel and power skyrocketing. Add into that mix the global supply chain challenges, global warming, extremism, nationalism, etc. and you have a perfect storm of uncertainty that leaders need to navigate their organisations through.
To be successful in this world, organisations need to anticipate and adapt to change, learn and pivot and deliver at speed. Not only do they face the challenges highlighted above, in most organisations they also face employing outdated management techniques, growing talent shortages, broken value chains, inflexible operating models, etc. The changes in how we managed organisations has only changed logarithmically and is not a great deal different to how we managed 30 years ago, when the world we operated in was a different place.
We have seen the rise of new ways of working and they have definitely assisted in modernising management practices. One only has to consider how many organisations have embraced agile to realise that we are trying new ways to keep up with the rate of change. There are challenges though, including still believing that there is a one-size fits all model for organising the work in the organisation; still using the thinking of the past to address the challenges of now; embracing ERP systems that limit our ability to be flexible; believing that automation is the panacea for success, etc.
So how do we address these challenges in this highly complex world? I read and research a great deal and I could not find holistic solutions that addressed the challenges faced. I thus, together with my colleagues at Be Agile, developed The Elastic Organisation™ thinking framework.
At its core, The Elastic Organisation™ enables an organisation to build a solid architecture designed to deliver optimum value to its customers, shareholders, employees and community. Whilst this architecture is solid enough to stand up to the rigours of operating in this complex world, it is also flexible enough to confidently meet any significant challenges that it will encounter such as COVID-19.
So – what are some of the components of building The Elastic Organisation™:
1. Deeply understand the markets and customer segments you wish to operate in and then develop and offer products and services that meet your customers wants and needs better than your competitors;
2. Instead of thinking about organisational architecture, start thinking of value architecture. Design your organisation around the delivery of value to your customers, stakeholders, employees and community. Here we see three key levels of value architecture:
a. Strategic value streams e.g. new products, new markets, etc,
b. Operational value streams e.g. call centres, supply chain, etc.
c. Support value streams e.g. finance, HR, procurement, etc.
One of the key aspects when considering these different levels is that they will, in most instances, be connected to each other with synergies and dependencies. A key idea behind The Elastic Organisation™ is that you need to ensure that there is sufficient flexibility within your architecture to optimally meet your strategic, operational and support needs. The rigid ways that we used to develop organisation architecture in the past needs to be replaced with interchangeable “hinges” that we can move around as required.
These “hinges” may need to be moved for any number of reasons including the organisation suddenly receiving a really large order; the organisation being faced with an external threat e.g. pandemic, cyberattack, etc. By applying this approach, the organisation can rapidly adjust the value architecture to optimally leverage the opportunities or fend off the threats.

Myles Hopkins will be talking about why he believed it was necessary to create this thinking framework.

Myles is a business agility influencer and leads the business agility community in Africa. He is the founder of Be Agile and has been a globally respected consultant for the past 19 years.