The economic environment changes at a fast pace. Our modern organizations no longer fit the situation and require more than just some adjustments in the way we work to cope with today's environment. Hyperagile organizations are tailored to turbulent economic contexts. They are different in terms of leadership style, management style, control system, and in the way people interact at work. This paper compares the way we work today in our modern organizations with the new model: hyperagile organizations. The paper presents nine differences between what functioned in the stable context of the 20th century and what organizations do to seize unfolding opportunities today. These differences show that the gap is really huge between modern and hyperagile organizations. At the same time, the hyperagile model is very simple. Sogilis, a French software company founded in 2008, is used as a case study to illustrate the hyperagile organization. This new model of organization is more effective, is better for innovation, works well in a turbulent environment, and its people are happier at work.
Not all organizations are the same. This paper introduces the main differences between two work environments that are also two different systems. The first system corresponds to the functioning of large organizations (government services, nongovernmental organizations, and corporations) created in the 19th, the 20th, and even the 21st centuries. In these modern organizations, decisions are made at the top and the rest is supposed to execute. Modern companies put value creation at the core of their purpose; employees are resources who serve the purpose. On the other hand, Hyperagile organizations put people at the core of their functioning. They are made by people and for people. The first part of the paper will introduce the reader to nine differences between modern and hyperagile organizations. In the second part, I describe some aspects of a real hyperagile organization, a company called Sogilis.
Hyperagile Verus Modern Organizations
There is no confusion between our traditional, modern organizations and hyperagile organizations. The leadership and management styles are different, the employees interact in different ways, and the control system is not the same. Here are nine differences between modern and hyperagile organizations.
N°1 – Size
Most of the successful organizations that were built in the 19th and the 20th centuries are big. The biggest company, Walmart, reported having 2.2 million associates globally at the end of 2014. Large companies perform because they have processes and procedures that require time to be put into place and to be changed.
These companies are made to be solid, bold, and robust—not to change. When the environment changes at a rapid pace, small teams are much more reactive than big teams.
Hyperagile teams are small. When there are more than 10 members in a team, communication takes more time, and people hardly know and trust one another. Collective decisions are still possible because everyone's ideas and suggestions can be heard; and people are more likely to commit to decisions. Should anything change in the environment, the team can talk about it and quickly adapt in hours.
N°2 – Decision Making
Modern organizations are based on hierarchy. Decisions are made at the top and cascade down through the organization. When an idea rises from the bottom, it must be sent to a higher level to get the support of an executive. Then an authorization is made for a proof of concept. The executive will make a go/no go decision based on the result of the proof of concept. Of course, it works only if the topic has been put on the agenda of the executive meeting.
In hyperagile organizations, associates are trusted to make decisions. At Happy Computer, a hyperagile British training company, Henry Stewart, the CEO, preapproves decisions made by his team. Here is how it works: A small group of people is assigned to find a solution to a problem. Instead of asking his associates to make a couple of proposals so he can make the decision himself, Stewart directly lets the group with full authority decide what needs to be implemented. Employees are trusted to do things the way they want and they are responsible for the results.
In hyperagile organizations, people who are impacted by decisions need to be heard to make sure that the decision is the best one. Stakeholders make decisions from consensus. On the contrary, in modern organizations, decisions are the results of trade-offs.
Alexandre Gerard, CEO of Chrono Flex (a French hyperagile organization), explains that when he decided to let the team make decisions, one of the first topics they discussed was salaries. “I was not comfortable at all,” Gerard explains. “Wages are a highly sensitive topic. I thought it was going to be a mess.” But after a few weeks, employees reached clear rules. Salaries were much more transparent for everyone and employees felt comfortable with that.
Hierarchy, processes, controls, and indicators were invented at a particular time to solve the problems that we had: to produce and distribute products at a global scale. In our modern organizations, decision making is a centralized process. In hyperagile organizations, decision making is decentralized.
N°3 – Main Stakeholder
In listed corporations, typically modern organizations, the most important stakeholder is the shareholder. This is why performance is eventually measured with financial indicators such as stock price, shareholder value, or profit. When sales are not growing, it is still possible to increase shareholder value by reducing costs by doing one of the following:
- Reducing purchases,
- Reducing salaries and non-wage labor costs, or
- Optimizing tax.
Negative consequences, when companies go too far in cost killing, might impact customer satisfaction or on innovation, which has a negative impact on sales. And the company is caught in a vicious circle. Hyperagile organizations are customer-centric. The most important stakeholder is the client. Hyperagile organizations commit to customer satisfaction as a priority. They know that money comes from the client. In hyperagile companies, quality is more important than cost. It is not a problem to pay more for salaries and purchases, as long as this corresponds to higher quality.
N°4 – Production
To be more effective, production in a modern organization is lean. The purpose of lean manufacturing is to eliminate waste, which is a good thing, of course—up to a certain point.
Many activities deemed unnecessary from the standpoint of production, including movement, motion, practice, or inventory, are removed in the name of leanness to save time and resources. But some of these activities have the virtue of making working conditions bearable from the standpoint of operators. Psychologists and doctors have proved that eliminating certain activities that are apparently not adding value to production causes musculoskeletal disorders and many others suffering at work.
Instead of having engineers telling employees how to work, hyperagile organizations let the people who actually do the job make decisions regarding the production line. Lean is not always the most effective way.
The quality of products made by modern organizations is based on process standardization: employees are supposed to apply processes. Hyperagile organizations require employees to take in information, apply their knowledge, and use their own judgment and ideas to do what they think is good.
N°5 – Monitoring and Controlling System
Modern organizations spend a lot of money and resources in the monitoring system. Procedures, processes, indicators, and dashboards are the usual tools and techniques to monitor and control. A lot of people are involved in the monitoring system, including the following:
- Human resources
- Tax department
- Internal control
In some modern organizations, more employees are paid to monitor and control than to actually produce or sell something. The consequence is that for every job, you have a list of processes and procedures to follow. Those who eventually do the job are no longer responsible: they just have to do what they are supposed to do. This is why they don't take initiative and don't share their ideas, and why it is complicated to innovate and engage employees.
In hyperagile organizations, teams and people are trusted to do their job their way. At the same time, they are accountable for the results to their colleagues or, if possible, directly to the customer. Hyperagile companies believe telling people how to do their job or controlling their outputs makes them feel disengaged, not responsible.
The results in hyperagile organizations are amazing, compared to modern organizations:
- Customer satisfaction is higher,
- Product quality is higher (fewer defects),
- More people are more engaged at work, and
- Costs are lower.
N°6 – Project Management
In modern organizations a manager, ideally from the executive committee, sponsors projects. This person authorizes the budget for the project and supports the project team at the higher levels of the organization.
In hyperagile organizations, there is no executive committee. Associates are trusted to make decisions such as investments, recruitment, authorization to launch a project, etc. When a couple of employees believe it is necessary to make an investment such as building a new website, implementing complementary assets, working to solve a complex problem, or moving to a larger workplace, they just do it. Of course, the project team is accountable to their colleagues for what they do or decide. The project can temporarily be put on hold in case of disagreement from a colleague until a new decision is made. Consensus is always required.
Note: Organizational agility is different from project management agility. Agile project management is not a characteristic of hyperagile organizations. Modern organizations can also execute projects in an agile way. They may use agile methodologies such as Scrum or XP for IT projects. Hyperagile organizations manage projects in sequence: design, build, verify.
N°7 – Organizational Changes
The shape of our modern organizations relies on the belief that we need two classes of employees: those who organize the work and those who do the work. In hyperagile organizations, all employees are knowledge workers. There is only one category.
In modern organizations, change comes from decisions made at the top. The challenge is to have people committed to those decisions. Instead, there is a lot of resistance to change. Over 70% of organizational changes fail. Modern organizations look for ideas, methods, and approaches to facilitate change. Managers and leaders feel guilty when they are not successful in engaging people into a strategic or cultural change.
In hyperagile organizations, changes come from the bottom. Employees are free to work the way they want. At the same time, they are responsible for results. They choose their processes, their method, and their equipment. They potentially choose their customers and the projects they work on.
When the automotive company Favi decided to let a team choose the quantity of outputs from their production line, they realized that the team could make 1,000+ units per day. Favi's CEO met with the team to understand: “You used to make 700 to 800 pieces every day. Now you make 700 to 1,000+. What happened?” The ladies replied: “If our controller had known that we could make more than 800, he would have set 800 as a daily norm. Now that we are free, and there is no more controller, working faster is no longer a problem, because we know that we are allowed to slow down if there is any issue or if one of us is missing.”
The CEO asked another question: “And why did you turn the equipment this way? It used to be the other way around.” The ladies explained: “It is much easier for us this way. We feel much more comfortable for us and we work faster. The logistics told us that it doesn't make any difference for them to collect our outputs on the other side.”
Jean-François Zobrist, Favi's CEO, explains: “My role as a CEO is not to tell my employees how they should work. My role is to tell them why. When people understand why, they feel engaged. When I let them choose how to do their job, they feel much more accountable for what they do. Sometimes the clients require us to do more in a short period of time, or they want something different. Well, we adapt! That's it. I don't know how. The team does. It is not about me and my ego.”
Modern organizations are made to be bold, stable, efficient, and predictable most of all. We haven't built modern organizations to change. Hyperagile organizations are made to adapt quickly to the turbulent world of today.
N°8 – Time to Market
Our modern organizations used to do things the same way for 30 or 50 years. Today when we take three years to develop a new product, like a new car or a new engine for cars, customer requirements have changed before the product is ready to be sold. The product no longer corresponds to the demand.
Hyperagile organizations are able to adapt existing products or projects to take new requirements into account. In the fashion industry, it takes traditionally six months to make a new collection. Zara has reduced the production life cycle to two weeks by making employees from stores, design, production, and logistics work together as a team.
N°9 – Employee Engagement
Employee engagement is a real issue in modern organizations. Gallup's research (Gallup, 2013) shows the following:
- 13% of employees are engaged at work. They work with passion and feel a profound connection to their company. They drive innovation and move the organization forward.
- 63% are not engaged. They are essentially “checked out.” They're sleepwalking through their workday, putting time, but not energy or passion, into their work.
- 24% of employees are actively disengaged. They aren't just unhappy at work; they're busy acting out their unhappiness. Every day, these workers undermine what their engaged coworkers accomplish.
Hyperagile organizations are built toward a mission, a purpose, a common dream that is unique. Employees are selected because they share the mission and the values of the organization.
Values are specific. Everyone may not share them. Southwest Airlines, for example, has humor among their values. They received a letter from a customer: “You shouldn't use humor in security announcements. Airline security is too serious. People died on 9/11 because of lack of security…” Most companies would have answered, “We are sorry. We'll make sure not to use humor in situations that might cause you some trouble.” Southwest didn't want to force anyone to share their values, but neither did they want to change their values to please everyone. They replied with four words: “We will miss you.” People who work at Southwest know that their company is different.
Henry Stewart, founder and CEO of Happy, explains that when they select a candidate, they consider both skills and attitude. Sometimes it is not possible to have the ideal person: someone with the right skills who also shares the values of the company. They have tried someone highly skilled who didn't have the right attitude. It gave other employees the message that a highly skilled employee doesn't have to share the values of the firm, which was negatively disruptive.
Hyperagile organizations select people who share both their values and their vision. They will give employees clear guidelines, trust them, and let them do their jobs the way they want. This is how they engage their employees.
The purpose of hyperagile organizations is more about people, whereas the purpose of our modern organizations is more about value creation and growth. Transforming a modern organization into a hyperagile organization would be a big effort. Our modern organizations are big and fragile: most changes in the environment have negative impacts on them. On the contrary, small hyperagile organizations are antifragile (Taleb, 2012); change makes them stronger, more solid, more resistant, and more robust.
The Case Study: Sogilis
Christophe Baillon was a passionate software developer. He realized that many decisions were based on short-term criteria, which led software to be very expensive, poor in quality, and very complicated to maintain.
In 2008, Baillon founded Sogilis, a software company in Grenoble, in the French Alps. From the beginning, the mission of Sogilis was to build robust software that tends toward zero defect and has low maintenance cost in the long run.
From the beginning, the core values of Sogilis have been:
- passion for software development,
- technical excellence,
- continuous improvement, and
Later employees have added two complementary values:
- Happiness at work, and
In 2009, Sogilis was trusted by a large European aerospace company to develop security software. Six months later, the client commended Sogilis for being the first supplier to deliver software on time, on budget, and with absolutely no defect.
This experience brought new opportunities to Sogilis. Since then, the software company has worked for many other industries, including healthcare, banking, and start-up companies. The priority for Sogilis has always been to put quality ahead of growth, because Sogilis is a hyperagile company, as the following shows.
Sogilis receives a lot of résumés. Applications are shared with employees. When any employee is interested in a résumé and wants to meet with the applicant, he or she makes an appointment. At least two employees must be interested for an appointment to be made. Every Thursday, at 11:40 a.m., there is a meeting around the résumé board for job application follow-up and to make sure that all candidates are advised of decisions.
Who comes to the meeting? Well, at Sogilis, this type of meeting is optional. Employees come on a voluntary basis. Generally, those who have taken an interest in any application show up.
Recruitment meetings last for two hours, minimum per applicant (who must be a software developer). Interviewees bring computer code that they have built themselves and of which they are proud. They explain their code to recruiters, who are software experts, of course. This is the first round of the application process. In the second round, the candidate works in a team with the recruiter to solve a complex problem. This original interview approach has a number of important advantages:
- Instead of asking theoretical questions, Sogilis puts people to work.
- Instead of recruiting people based on their diploma, Sogilis selects professionals based on actual skills.
- Spending two hours with one person who is actually doing real things gives employees time to assess whether this person shares the values and the mission of Sogilis.
- Having two recruiters in the same meeting with the applicant reduces the recruitment risk.
If the candidate is selected, there will be a third round with Christophe Baillon or Laurent Mangue, who has been a Sogilis partner since 2012.
How Many are Recruited
Sogilis intends to recruit five or six new associates in 2015. This is not frozen. It depends on whether candidates fit in with Sogilis: do they share the mission and the values of the company? They could hire more people, or less. Sogilis never recruits employees to staff a project. It works the opposite way: making a project depends on who is available and willing to work on it. Sogilis selects projects based on three criteria:
- The projects being interesting in employees’ eyes is a prerequisite. If no employee is interested, the company explains to the customer that they are not interested in the project.
- At least two employees must be interested in and available for the project. If only one associate is interested, the company refuses the contract.
- The only people who are allowed to select a project are the employees who will actually do the job. Salespeople are not allowed to accept a contract or accept a change request from the client without the approval of those who do the job.
One can see from the recruitment process that there is no human resource department at Sogilis. There are no support functions like HR, finance, audit, legal, or tax expert. There is no executive committee. All employees work in sales or in developing software.
Sogilis creates high-quality software with no quality controller. Sogilis offers its clients a guarantee of five years against any defect. Associates who do projects are responsible for the projects they do. The only people they refer to are the clients. They are absolutely transparent with clients. The client has access to the details of the project metrics.
There is no project review with a project portfolio manager or any other bureaucrat. Transparency is a value at Sogilis: Should a problem arise, the team has to immediately inform the client in order to look for the best solution. The earlier the problem is communicated, the less expensive the solution. The team is trusted to do the job their way. They are allowed to talk about a technical issue with their colleagues: Some are more expert than others. Remember: Support is also a value at Sogilis.
Employees have a personal budget, which they can use to buy equipment, training, and other expenses. They are free to use the development tools the way they want. Some prefer Linux. Others prefer to work on an Apple computer, which is more expensive. Of course, those who work on Apple have less budget for other expenses.
Everyone makes decisions regarding their own vacations. They just have to inform the CEO before they leave. Employees don't wait for a formal authorization before booking their flight or their train, and nobody abuses vacation. Anyone who would take too many vacations or who would take holidays at a period when there is a lot of work would cause a problem for clients or colleagues. Again, support is a value at Sogilis.
The only tool that is mandatory is the dashboard. Each employee knows exactly about the company's health from the dashboard. Everyone can see the details of their own project, of another project, of the cash flow, or of any financial statement regarding the company. Transparency is another value at Sogilis.
Modern organizations require employees to take initiative. But when employees come up with ideas like “I would like to go and work to Australia” or “Let's make a drone,” most executives reply: “Well, this is not exactly the type of initiative I was thinking about. I was expecting ideas to be cheaper, faster, or to sell more to our existing clients here in France. We have no customer in Australia, and they don't make drones. Come back to earth!” This creates frustration on both the employee and employer sides, and some kind of disengagement.
Going to Australia
Of course, this is not how it works at Sogilis. One day an associate came to Baillon and said, “I am going to quit. I'd like to go to Australia.” The CEO asked: “Do you like to work here?” “Yes, I love it. My decision was hard to make,” the employee replied. Then the CEO offered: “Let's launch Sogilis in Australia, then!”
It has not been that simple, but they are actually creating a subsidiary of Sogilis in Australia, which is exactly on the opposite side of the earth from France.
Creating a Drone
The idea of the drone was making more sense. The execution of the idea was amazing. It started one morning at the coffee machine. A developer who worked on security software for aircraft said: “When people see the aircraft, they can't imagine that we make the security in it. If only we could make a drone, it would be our drone!”
Then they started to talk about what kind of drone they could make and someone thought of a “flying camera.” Sogilis is in the middle of the French Alps; most employees go skiing on the weekends. They looked in their network for a very good skier who could promote the drone. They got in touch rapidly with Xavier De Le Rue, a French snowboarder and former world champion, today known for his extreme snowboard riding video channel on YouTube. They also found other partners for the project.
Once the product requirements were clear, the team launched a call for funds on Kickstarter, the crowdfunding Internet platform. The objective was to make $50,000 in pre-orders during the month of July 2014. The operation was a huge success; they reached the objective in only 37 minutes! In a month, they raised US$1.3 million.
Then they founded a new company, Squadrone System, in March 2014. The drone is called Hexo+.
Most important is that the project was an opportunity for employees to work on a drone project. It was also an opportunity for Sogilis to become known as a reference in the aerospace industry for its expertise on security software.
The success of the drone project proved that Sogilis has know-how in creating start-up companies. They decided to apply this knowledge to help the development of new ideas by optimizing resources. This new initiative is called Startup Maker.
A New Way of Growing the Business
Modern corporations develop their business by focusing on an expertise. They start by defining where they want to go. Then they develop the key success factors required to reach the goal. Lastly, they look for people to do a job that has been standardized.
In other words, modern organizations do the following:
- Have a goal,
- Define key success factors, and
- Look for followers (people) and other resources.
Sogilis works in the opposite way: They put people first. The direction will depend on where people want to go. Because employees have the energy, they also have the passion, and it works. If they are missing a key success factor, they use their personal network to find the right partners.
Hyperagile organizations work this way:
- Start with the people you have,
- Clarify what you want to do together, and
- Look for complementary leaders to make your dream come true.
Teams are kept small at Sogilis; 30 is the maximum number of employees in a given team. Sogilis started in Grenoble, then created a new team in Lyon, France, and another one in Paris, France. Teams look like different companies: each team is given freedom to grow the way they want locally: they make decisions regarding their clients, their products, their recruitment, the investment. Teams may cooperate with one another. Here Sogilis looks a bit like what Richard Branson has done with Virgin, the corporation he owns.
Modern organizations are made to last, not to change. When the environment becomes turbulent as it is today, modern organizations are in danger. The danger outside is the pace of change. The danger inside is employee disengagement. People are not willing to change because they no longer want to follow leaders who tell them how to do their jobs. People need to be given freedom and responsibility. This is how organizations adapt to a turbulent environment.
The problem is that the hyperagile model is very new. Not many companies know how to engage people. Many leaders prefer control instead of trust. Switching from a top-down approach to a bottom-up approach is about changing a system. Can we change a system? It might be easier to create a new one.
Our modern organizations are in danger because of the danger outside (change at a high pace) and the danger inside (employee disengagement, struggle to innovate, failure in change, and slowly decreasing effectivity). We should encourage the creation of hyperagile organizations for the following reasons:
- They are more robust in changing environments,
- People are happier and more engaged at work, and
- They are economically effective.
Gallup. (2013). State of The Global Workplace: Employee Engagement Insights for Business Leaders Worldwide. Washington D.C.: Gallup Press
Taleb, N. N. (2012). Antifragile: Things that gain from disorder. New York, NY: Random House.
© 2015, Yves Cavarec
Originally published as a part of the 2015 PMI Global Congress Proceedings – Orlando, Florida, USA