What does the octopus teach us about Agile organization design?

This article is a translation of the English original. Author: Jorgen Hesselberg

This article was written as part of the Supporting Agile Adoption program, an Agile Alliance initiative dedicated to advancing Agile.

There are some questions for which there simply are no good answers. "Why do we dream?", "Are we alone in the universe?" and "Who killed Jimmy Hoffa?". Another such question is "What does an Agile organization structure look like?"

Nevertheless, this was one of the questions I was pondering together with colleagues at a workshop in Stockholm in December. You can also listen to this episode of the podcast Agile Coaching Network

Organizational design cannot be right or wrong. It simply is. The design that an organization chooses to manage its work reflects its values: in the chosen organizational structure design, imbalances in one direction or another among various functional entities relative to each other are always visible.

Some organizations value clarity. A hierarchical chain lets you always know what to do and clearly see the decision-making mechanism. Faced with a difficult situation and not knowing what to do? Just ask your manager and an answer will be found. If your manager doesn't know the answer, they will ask their manager. One way or another an answer will be obtained, direction will be set.

Of course, despite the tangible advantages, this way of organizing is also fraught with many problems. Hierarchical structures, as a rule, ignore diversity of thinking, can make decisions very slowly when faced with ambiguous situations and, overall, are poorly suited to a complex environment.

This is one of the reasons why business is increasingly looking for other, more modern ways of organizing work.

For example, Spotify's approach to organizational structure tends to optimize for creating stable teams and focusing on specific elements of its product. As Marcin Floryan from Spotify explained to me, work is handed to teams so that these groups of people work together over a significant period of time and, in this way, become increasingly productive. For example, a team may focus on elements of its application related to offering podcasts to users and devote itself to this area for some time. When business needs change, the same team can switch to other product elements, such as personal playlists or recommendations to users. This structure is oriented toward natural products and people are involved - this is not accidental.

Although this approach has obvious advantages for the degree of team awareness, cross-team collaboration and internal interaction, Marcin readily acknowledges that it also has certain problems. This structure works well when employees are co-located and works worse for distributed teams. As organizations grow in size, distributed teams become more the norm than the exception. This is true even for Spotify. This can create problems for performance, since teams do not stay fresh over time in terms of burnout. As Heidi Helfand notes, teams (and organizations) go through natural cycles where disruption may actually be necessary and healthy - keeping teams on the same product with the same composition for too long can be counterproductive.

As our group discussion unfolded this December weekend, we agreed that organizational structures are inherently imperfect for ensuring the maximum business agility required in a VUCA business environment. Are there other analogies that could better illustrate how Agile organizations seek to self-organize?

Perhaps in this context, studying the nature of organic beings could prove useful. John Buck, consultant and co-author of Bossa Nova, noted that the human brain—when attempting to learn something—releases the presynaptic protein neurexin to search for places where it can create new synapses. When this happens, there is no preordained structure or pathway—the chemical neurexin spreads with emergent chemical encoding that defines the requirements of the new learning.

This concept is a powerful analogy: because organizations adopt changes and carry them out with a specific purpose, they not only coordinate their employees to achieve strategic goals—they must also quickly identify, learn, and respond to changes in business conditions. This is analogous to what happens when the brain detects changes and responds quickly with new adaptations.

Nevertheless, however interesting this analogy may be, it seems very "top-down" and hierarchical. At the top is the brain, which sends signals about what to do; the rest of the body simply reacts and does not think for itself.

Thus, a more suitable organic analogy might be to look at the soft eight-armed cephalopod mollusk—the octopus. This mollusk has an extremely complex nervous system. In fact, two-thirds of its neurons are contained in its own tentacles of the invertebrate—so you could argue that the octopus has several "brains." This means that parts of the octopus's body can make autonomous decisions without reacting to top-down commands. The octopus also regenerates excellently; if an arm is removed, it immediately begins the regrowth process, when a completely new tentacle grows—from the internal nerve bundles to its external suckers. This is an excellent metaphor for creative destruction.

Perhaps this means that organizations, as SAA executive director and program director Hendrik Esser stated during our workshop, "must be more like octopuses!" (I confess, I never thought I would hear that at a workshop on Agile leadership.)

This analogy is strikingly intellectual, but it is not so simple when applied in an organizational environment. In practice, how do the "brains" coordinate decision-making in an organization? However complex the octopus may be, it is ultimately an invertebrate with a certain static purpose—to obtain food and reproduce. How does decentralized, autonomous decision-making translate into an organization that must solve more complex problems?

And what about self-interest? The octopus—its entire body—has a strategic intention. The brain's own interest aligns perfectly with the neurons' interest in its tentacles. Neither side fights to become the CEO of Octopus, Inc. But what does this look like in an organization where what is best for the organization may not be best for the local market or a department head? What does it mean when conflicting interests must be coordinated and somehow implemented in practice? However informative and thought-provoking the octopus analogy may be, it quickly breaks down when we try to translate many concepts into organizational contexts.

Ultimately, I came to the conclusion that what organizational structures strive to create is a shared sense of reality among their people. A way to exchange information in a timely manner at the level needed to make decisions that create value for the organization. Speed, coordination, and collaboration matter—and the context in which you operate will determine what this looks like for your organization.

Thus, there is no single "agile organizational structure" that we could plug into an organization and magically expect agility to appear. There is neither a supernatural nor an organic analogy—neither a unicorn with a rainbow leap nor a glorious kraken—that would clearly explain how an agile organization manages its work.

Rather, as I explain in "Unlocking Agility" and as described in "Bossa Nova" by Jutta Eckstein and John Buck and further defined in leadership models such as Beyond Budgeting, there is a heuristic that these analogies help us highlight. The values, norms and behavior patterns that we consistently see in organizations using a more flexible way of working.

Although this is not a complete list, these are the key characteristics that I consistently observe in successful Agile organizations:

• An end-to-end, customer-focused perspective: internal handover of service and the distance between the people and teams developing the product and the customers who receive it is minimized.
• Self-organization to achieve a common goal: people, teams and organizational structures evolve organically, delivering value to the customer.
• Commitment to continuous improvement: Agile is not something you become; it is something you become more of. Agile organizations learn constantly and are better tomorrow than yesterday.
• People feel safe and are empowered to do the right things: managers and leaders strive to create an atmosphere of psychological safety; people can make autonomous decisions within boundaries.

Although the workshop in Stockholm on that December weekend did not answer the question of what a flexible organizational structure looks like, it helped clarify the work needed to achieve it. Business Agility is not a destination; it is a continuous effort to "accept change and deliver with purpose." A company's organizational design is only one of the aspects to consider when transforming into a more flexible organization.

Yes, and at the end of December I got an answer to one of those impossible questions. Martin Scorsese's brilliant "The Irishman" vividly showed who killed Jimmy Hoffa. But you have to see it yourself to get the answer - no spoilers!

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This is an Agile Alliance community blog post. The views expressed are personal and belong solely to the author. They do not reflect the opinion or policy of Agile Alliance.

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Originally published at https://www.agilealliance.org on February 13, 2020.