By Liz DeVito, ALM Intelligence Management Consulting Research
Capgemini Invent offers a new approach for designing digital-era operating models, the Minimum Viable Organization (MVO). Claudia Crummenerl and Markus Cramer explain how MVO enables clients to preview the effectiveness of potential future operating models and accelerate their implementation.
Leaders of established businesses are fully aware that they need to change how their organization is structured if they are to succeed in the digital economy. They know their business must continuously adapt to changing market conditions and consumer demands, and that transforming the operating model to become agile is core to building this capability. The overriding challenge is how to do this.
Capgemini Invent's nearly ten years of proprietary research into change management and organization strategy had already proved that most enterprises were eager to apply the principles and values of agile methodologies to their organization design. Shaping those desires into a blueprint for action seemed to be out of reach, however. The research revealed challenges along many fronts, including persistent organizational silos, risk avoidance behaviors, rigid cultures, and resistance to sharing responsibilities. Furthermore, there was no consensus among survey respondents around the best methods, success factors, priorities, and timing for becoming agile.
"I've had many conversations with clients about the amount of time it takes to transform the operating model," says Claudia Crummenerl, Managing Director and Global Practice Lead of Capgemini Invent. "The traditional approach focused quite a bit of time on needs assessment and design, in the hopes of arriving at the one perfect operating model that served all aspects of the business and would require a one-time only implementation. Not only is this an outmoded way of thinking about how to run a business in today's world, no one has this kind of time anymore. We wanted to find a way that linked both activities more closely to get results more quickly."
Capgemini Invent directed its efforts at rethinking the firm's entire approach to operating model and organization design to one that embeds agile principles and values into the transformation process, resulting in the Minimum Viable Organization (MVO).
"The traditional implementation method was based on the waterfall principle, which leaves no room for pilots or adjustment," explains Markus Cramer, a Principal in Capgemini Invent's Innovation & Strategy practice. "MVO revolutionizes this approach by allowing clients to pilot core components of the target operating model under real conditions, thus enabling an iterative optimization of the target operating model throughout the implementation."
Quick experimentation and continuous iterations are core to MVO. The starting point, however, is an assessment of the current operating model, focused on identifying its pain points and sweet spots and prioritizing key levers of the dexterity model to incorporate into the new design. The target image description is based on the assessment's findings and serves as the compass for the new organizational model. However, it is only described or defined up to a necessary level and not down to the last detail.
The target model is then broken down into 'viable' organizational components (MVOs), which can be piloted. As they are implemented, the remaining parts of the organization continue to exist unaffected apart from necessary adjustments to interfaces and governance mechanisms. MVOs are rigorously monitored and evaluated against predefined targets, then continuously fine-tuned until a pilot meets its goals.
Capgemini Invent has garnered positive feedback on MVO since its launch over a year ago. Clients are particularly enthusiastic about how MVO showcases the immediate impact of operating model transformation on different parts of the organization and how that affects the interaction and motivation of employees and leaders.
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