views a business mainly as the hierarchy of accountability for business functions. In this view, to adapt to change is a quite clumsy and time-consuming process, too slow to cope with acceleration.
Especially if - like in most such cases – multiple functions need to engage.
instead recognizes the entire business as an ecosystem.
This means to consider the business as:
In this framework the approach to adaption is very different and much faster: instead of going up and down the hierarchy for decision making, planning and execution we can focus on one single element to adjust: the constraint in the flow to be resolved. Then we can quickly agree with the concerned owners on how to move forward, in a networked project.
As Kotter says in his article in Harvard Business Review: “a different methodology than we traditionally use in daily management”
The second principle answers the question “How to set performance goals for the business?”
Daily management and managing agility offer two answers to this question:
This principle answers the question “Who is accountable for achieving business goals?”
assigns accountability based on the assumption: “all owners of hierarchical units in the company are accountable to achieve their KPIs”
Facing accelerated change this “top down” approach makes a business too slow to recognize and cope with changes either taking place or foreseen.
we assign accountability for revenue to those units, which are directly responsible for that flow, to put priority on revenue generating units. Each of these units is accountable to lead its ecosystem to reach its own revenue goal.
Like manufacturing, finance, H.R., IT, …
These units contribute by assisting revenue generating units to achieve their goals, with initiatives specifically designed for that unit.