Many companies have long been striving for greater agility while assuming that they must choose between much needed flexibility and speed, on the one hand, and stability and efficiency of scale, on the other.

Let us take the example of start-ups. They are notoriously well known for acting quickly, but once they grow beyond a certain size, often they struggle to maintain that initial speed and agility.

Similarly, large and established companies often look at fixed organisational structures and standardise processes to guarantee stability and capture the efficiency of scale, thus gradually becoming bureaucratic due to the rules, policies, and management layers and ultimately hampering their own ability to move fast.

The truth is that high-performing companies are often extremely stable, with certain organisational features that remain the same for long periods, and rapid innovators that could adjust their resources quickly. In fact, truly agile organisations learn to be stable, resilient, reliable, and efficient, fast, nimble, and adaptive.

To master this paradox, companies must design organisational structures, governance systems, and processes with a fixed core, that is, a relatively unchanging and stable set of elements, to endure over a reasonable period, more like 5 to 10 years.

The stable core should be complemented with more dynamic capabilities that can be adapted quickly as new opportunities arise or unexpected challenges threaten to destabilise formerly protected profit streams.

However, there are 3 tensions that must be balanced to actually integrate stability with flexibility.

The first tension is about how resources should be allocated. Successful organisations often deliberately choose which dimension of their organisational structure will be the primary.

This choice will dictate where individual employees are primarily and formally allocated, and this primary home remains an anchor along their career paths. For example, when functions become the primary home, employees could be assigned primarily to technical, sales, supply chain, and customer service departments.

On the other hand, day-to-day work, performance measurement, and reward determination are more likely to occur in teams that cross formal structures. These teams form, dissolve, and reform as resources shift in response to new opportunities or unexpected challenges.

These dynamic teams could be reported in the organisational chart in the form of product units with P&L accountability, considerable decision making in product strategy, in where and how the company should invest its resources, while driving collaboration across functions and geographies.

In other cases, dynamic components are implemented as business lines or market segments, a sort of performance unit for customers with the same needs and product requirements. These market segments are temporary units composed by employees from across the organisation (e.g., IT, marketing, finance) and reviewed periodically through clearly defined key performance indicators (KPIs). Companies could decide to keep these units operating, shut them off, or give them more or fewer resources.

The second tension is related to how decisions should be made. The idea behind this is to establish both stable and dynamic elements in making decisions.

Often successful companies define which decisions are best made in committees and which can be delegated to direct reports and to people close to the day-to-day action, distinguishing for different types of decisions.

Among them, there are important decisions where the stakes are high, frequent decisions that require cross-unit dialogue and collaboration, and decisions that should be parsed into smaller ones and delegated. This is the part related to the stable core.

Additionally, to make fast decisions and adapt to changing circumstances, successful companies dynamically rotate members of such committees and spend meetings engaging in robust discussion and real-time decision-making, rather than sharing information through endless presentations, dealing with issues that have already been resolved.

The third tension is about processes and how things are done, including the management of performance. The idea is to create a stable core for signature processes, where they are key processes in which the company excels at and that can be explicitly standardised, and they are hard for competitors to replicate. For example, they could be related to product development, supply chain, innovation management, or other activities.

When process standardisation is lacking, agility suffers. Employees spent too much time on internal discussions about best practices, methodologies, and process frameworks and not enough on actively improving their own way of working.

Extra dynamism comes from two new overarching roles in the organisation, that of the business process owner, who champions and improves each signature process, and that of the process integrator, responsible for cross-functional collaboration, execution, and performance management. The integrator is responsible for meeting specific end-to-end KPIs and targets and for leading cross-functional teams that execute processes.

It is in the nature of an agile organization to regularly rethink and (if necessary) redesign their structures, governance systems, and processes to strike a better balance between speed and stability, following a constant improvement approach.