Structuring an Organization Using Value-Based Teams

Organizational Agility
Knowledge Center

Best Practices

Sign up

Hong Sun
Management Consultant, Canada

Structuring an Organization Using Value-Based Teams

Changes in organization structure can be a critical part of an organization's agile transformation. One such change is the construction of value-based streams or teams rather than using traditional silo functions. Hereunder are four steps to shift an organization's structure from traditional silo functions into an agile one using value based teams and streams:
  1. IDENTIFY VALUE DRIVERS
    To change an organization's structure into value based teams, the first thing to do is to identify the value drivers of the organization in order to structure the business into appropriate value streams. Value drivers are values that distinguish the company's products and services in its customers' point of view, such as customer segment, product category, geographic area, or sales channel, etc.
  2. IDENTIFY VALUE CREATION CONTRIBUTORS
    The second step is to identify the contributors in each value creation process or value chain. Basically, anyone that is indispensable in converting the resources to a new product or service is a contributor in the value chain, such as a business line product manager, an engineer, a relevant R&D person, and a marketing expert, etc.
  3. CONSTRUCT VALUE-BASED TEAMS
    The third step is to realize the structure of value-based teams, or "squads," which are the essential cornerstones of an agile organizational design.
    • "Squads" are usually composed of 6 to 12 people each.
    • They are "end-to-end" covering the whole chain, from generating a business idea to delivering value-creating products or services to the customers.
    • They all include the critical role of a client representative to make sure that the person who talks to and understands the customers is in the team.
    • "Squads" must be autonomous and sufficiently empowered to make operational and tactical decisions without hierarchical approvals.
    • And "squads" members must be dedicated and permanent.
  4. DISAGGREGATE THE PRODUCT INTO SMALL CHUNKS
    Finally, when we decentralize the structure into small, autonomous, and multidisciplinary squads, we also have to simultaneously disaggregate the product into small chunks, each with intrinsic value in terms of the product feature or the production phase, etc. By using small teams to work on small chunks of products, we have a strategy to manage complexity and volatility at the same time.

Source: Collet, B. (2018a, May 28), From functional silos to value-based streams (agile value-oriented enterprise)

  Meheresh
Management Consultant, India
 

Decentralized Strategy

1. This allows the organization's strategy to be t (...)

  Molokanova
Professor, Ukraine
 

Personalities of Members of Value-Based Teams

Ms. Hong Sun has done a great job. Nevertheless, I (...)

  Hong Sun
Management Consultant, Canada
 

Value-Based Teams is But One Out of the Multiple Shifts Towards Agile

@Meheresh: You're right. An organization needs to (...)

  Raymond V. Hall
Consultant, United States
 

Support Functions for Value-Based Teams

With this or any organizational team there are sup (...)

  Hong Sun
Management Consultant, Canada
 

Shared Functions (Competences) Along with Value-Based Teams

@Raymond V. Hall: In shifting the organizational s (...)

  MICHAEL RAVAIN
HR Consultant, United States
 

Value-based Teams -- Chapters and Interdependence

I find the value based teams org design to be very (...)

  Hong Sun
Management Consultant, Canada
 

Squads, Tribes, Chapters and Guilds

@MICHAEL RAVAIN: In the organizational chart (of I (...)

  Jaap de Jonge
Editor, Netherlands
 

Strategic Reasons for Organizing Using Value-Based Teams

Thank you for this very interesting post! Still mi (...)

  Anonymous
 

Value-based Streams or Teams?

Should we call this approach "value-based streams" (...)

  Molokanova
Professor, Ukraine
 

Value-oriented Team Management

Here are the basics of value-oriented team managem (...)

  Hong Sun
Management Consultant, Canada
 

Value-based Streams or Teams

@Anonymous: In fact, a value-based stream is usual (...)

Start a new forum topic

 

More on Organizational Agility
Summary
Forum
🔥What is Agile? History and Meaning
Beware of Fake Agility ('Fake Agile')
Human Capital Agility is Critical for Organizational Success
5 Cogs of Innovation (Appelo)
Digital Business Agility
Rapid Response Management
The Need for Ruthless Prioritization in Agile Leadership
How to Become Agile in Organizational Change?
5 Types of Agility (Prasad)
How to Become an Agile Employer?
The 3D Agile Leader Model (Collet)
What is Agility and Why is it Important?
Best Practices
What is an Agile Mindset? Attributes of Personal Agility
6 Principles to Create an Adaptive Organization (Reeves)
Leading in Challenging Times: Creating Agile Organizations
The Main Barriers to Building an Agile Organization
Structuring an Organization Using Value-Based Teams
3 Laws of Agile Organizations
How to be an Agile Leader?
Special Interest Group

Do you have a keen interest in Organizational Agility? Become our SIG Leader

Organizational Agility
Knowledge Center



About 12manage | Advertising | Link to us / Cite us | Privacy | Suggestions | Terms of Service
2021 12manage - The Executive Fast Track. V15.8 - Last updated: 3-8-2021. All names of their owners.