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Creating an agile company

Cedric Christie

Small teams with the freedom and power to make a difference are the “lifeblood” of an agile business, write Oliver Bossert, Alena Kretzberg and Jurgen Laartz for McKinsey Quarterly.

“If I see more than two pizzas for lunch, the team is too big,” says Amazon CEO Jeff Bezos. Small, agile teams have made Amazon one of the most successful companies in the world.

Traditional command-and-control management is dead. Teams made up of a small number of individuals who possess the skills to complete a specific task, and are given the freedom, guidance and resources to do so, are the engines that power all modern, agile businesses. It’s your job to create an environment in which small teams can flourish.

The success of these teams depends on three elements: the “empowering” executive, the “enabling” manager and the team itself.

1) The executive. The executive’s job is to create small, customer-facing teams of top performing individuals, provide them with a clearly defined task and the resources to complete it and provide further support when needed.

2) The team manager. The role of the manager has been redefined – their job is no longer to make decisions but to facilitate their team’s success.

3) The team. The team itself should be independent – able to act without seeking approval from senior management or depending on other departments, e.g. finance, planning or HR.


In order to empower your teams, you should prioritise these four actions:

1) Focus on what matters to customers. If you want to demonstrate the effectiveness of independent teams you must be bold and create units responsible for areas of your business that matter most to your customers.

Don’t fear risk. “In practice, independent teams create less business risk, because they make incremental changes that can be rolled back with ease if they don’t work out,” write Bossert, Kretzberg and Laartz.

2) Pick the best. If you want your teams to succeed, pick the most talented staff from a variety of different departments. Strength and diversity are key.

“Creating a new team is probably the most important thing managers can do, so make sure you get it right,” says Scott Richardson, chief data officer for US mortgage loan company Fannie Mae, in an interview with McKinsey:

“When we created our initial agile teams, I was personally involved with structuring them and selecting team members. It might sound crazy to get so involved in this level of detail, but it is critical that the early teams become true beacons for success.”

3) Make sure your teams know your customers. The role of each team is to make small and frequent improvements to the customer experience. In order to do this, team members must have access to as much information as possible about your customers and their experience with your company.

4) Keep your teams on the fast track. Provide your teams with all the resources they need right from the start and give them the authority to utilise those resources without encountering road blocks, e.g. the standard HR procurement process when hiring contractors or new talent.

With freedom comes responsibility. You must hold teams accountable, and if they are not achieving their objectives, step in and redirect resources towards more productive efforts.

“McKinsey research has found that tying budgets to strategic plans is more closely correlated with higher growth and profitability than any other budget allocation practice that is linked to superior performance,” write Bossert, Kretzberg and Laartz.


Agile teams require agile managers. Agile managers differ from traditional command-and-control managers in the following three ways:

1) They see themselves as guides. Managers should define the project objectives and then set their team free to pursue those objectives, providing guidance when needed.

2) They see themselves as part of the team. Independent teams dedicate the majority of their time to the task at hand – action – rather than group discussion and planning, usually holding one 20-minute stand-up meeting per day.

Therefore, the primary responsibilities of managers are improving communication between team members, using their expertise to help with problem solving and long-term planning, rather than issuing orders.

Platforms such as Jira and Slack allow managers to troubleshoot problems in real time.

3) They are willing to learn. Companies that have embraced agile ways of working are few and far between, so most managers will need to adapt quickly.

Executives have a responsibility to provide opportunities for managers to evolve. This might include training managers to use new technology, ensuring they work with a variety of independent teams to broaden their experience, pairing them with peers who have more experience of working with independent teams, and introducing new ways of evaluating performance that focus on “measurable outcomes”.


Realising the power of independent teams is vital to becoming an agile company, but many companies fail in this undertaking because executives don’t give these teams what they need to succeed.

“Those who do will see their small teams become more independent, and more capable of producing innovations and performance gains that keep their businesses ahead of the competition,” conclude the authors.

Source Article: Unleashing The Power Of Small, Independent Teams
Author(s): Oliver Bossert, Alena Kretzberg and Jurgen Laartz
Publisher: McKinsey Quarterly