Rewire the DNA of Your Business for Speed and Agility

In this article, we discuss:

• Trends pushing the need for agile ways of working and key characteristics associated with them
• An overview of the McKinsey-developed helix model and how it differs from other types of organizational models
• The four principles to achieve success with a helix organizational model

No longer just an aspirational state of being, agility has become a necessity for companies to survive and thrive. But despite the acceptance of agility as a pressing imperative of the modern organization, HR leaders need to confront the next challenge: making agility scalable and sustainable.

That requires agility built into the company’s organizational structure, meaning the reporting structure or management hierarchy within your company. To thrive in the fast-changing and disruptive “now” of work (to say nothing of the future), all companies need a consistent approach that enables agility.

We talked with Dr. Kirsten Weerda and Andy Fong, partners within McKinsey’s people and organizational performance practice, about a structure worth considering for maintaining sustainable and scalable agility: a helix organizational model.

Developed by McKinsey, this model is designed to promote cross-functional agility backed by stability, or, put another way, to strike a better balance between centralization (being efficient and stable) and decentralization (ensuring speed, flexibility, and entrepreneurship).

Uncertainty Pushes the Need for Agile Ways of Working

Operating with agility has always been needed in business but has come to the forefront as companies now regularly face changing, unprecedented demands. These include adapting to emerging technology, quickly shifting to a digital business model, and navigating an increasing number of remote and hybrid work structures.

For example, the automotive industry has seen tremendous technology shifts—autonomous driving, electromobility, and so on, Weerda explained. At the same time, there’s uncertainty about when the new technologies will fully pick up in the market. In fact, many manufacturers were surprised that demand for electric vehicles picked up quite quickly during the coronavirus pandemic. Entering 2024, the demand for electric vehicles is  expected to slow down.

“Manufacturers still need to develop in parallel both electric vehicles and traditional combustion vehicles, which requires shifting the right workforce to other areas,” Weerda said. “The uncertainty and cost pressure on one side and the need for more flexibility and speed in the way people work is tremendous.”

But while agility in an organization can refer to moving fast, it’s not necessarily about breaking things or creating chaos.

“If you’re only stable, you might become overly bureaucratic. If you’re only dynamic, you’re more in a start-up mode where things are just done by, ‘Ah, you do that. I do this,’” Weerda said.

You need both for agility, Weerda explained. Stability means having consistent development processes with clarity on roles and responsibilities across the company. Dynamic includes having the capability of moving people within a development organization and quickly creating a new team that knows how to work together.

As Weerda put it, “Agility—it rhymes with stability.”

“Agility and stability go hand in hand,” Weerda said. “To achieve this, a clear organizational frame and meaning; consistent structures, processes, and ways of working; and aligned priorities must be established. This overarching frame allows individuals to act and make decisions flexibly without creating chaos.”

Consider this: When working in a remote environment, a traditional, chain-of-command structure can create a dependence on managers for day-to-day direction. However, this level of direction may not be possible due to the lack of face-to-face interaction.

Instead, an agile organizational model with agile capabilities aims to cultivate a self-directed mindset in individuals, encouraging them to take initiative and collaborate with team members to solve problems on a day-to-day level—without waiting for instruction from managers.

Empowering the Future of Work: How the Helix Organizational Model Drives Agility

Leaders know that innovation and change are the keys to success in digital transformation. That requires empowering individuals to move quickly while also ensuring that business priorities are met. 

Seeing that need, McKinsey developed the helix model—an approach that generates high clarity into the balance between flexibility and stability.

So what is a helix organizational model?

A helix model is a double-helix structure where each spiral is a line that represents a differentiated reporting line with different management tasks associated with it. One of the reporting lines is primarily concerned with developing the individual’s capabilities and functional excellence. The supervisor in this role is considered the “capability manager” who sets the standards for how the work is done. This reporting line is referred to as the “capability” unit and considered the stable “home” for employees. 

The capability manager’s key tasks are to ensure two things. first, the capability manager ensures that your people have the right capabilities and provide the right people at the right time to the value-creation areas. Second, because the right people know the topic well, the capability manager ensures that they have the functional excellence and state-of-the-art processes and tools to best do their job.

The other reporting line has the end-to-end business responsibility (for example, profit and loss, and budget responsibility). It focuses on the individual employee’s day-to-day work and aligns this work to the business’s priorities. This is considered the “value creation” unit, and the supervisor representing this reporting line is considered the “value creation manager.”

Individuals can be shifted across value creation units easily; for example, to other projects, as the business priorities change. This is possible because the capability manager, who is responsible for the people, has no reason to hold on to the people, which typically happens in more rigid business unit structures.

“Unlike a traditional hierarchical model where individuals are rigidly tied to a supervisor [traditionally called the “solid line manager”] or a project, the helix model promotes fluidity,” Weerda explained. “Personnel can be seamlessly integrated, being staffed out of the capability units into various projects as needed, emphasizing the organization’s adaptability to changing market demands and project scopes.” 

Other key differences exist between a helix model and other organizational models. For example, some modern organizational structures, such as a dual or matrix structure reporting model, have two supervisory reporting lines but one is a metaphorical solid reporting line and the other is a dotted reporting line. This can mean a supervisor formally manages project-based tasks and evaluates the employee’s performance while the secondary supervisor is involved in some project-based work. In a helix model, both reporting lines are considered accountable and equally important while still having clearly differentiated management tasks: one about the people and one about driving the business and managing the budget.

And unlike the highly dynamic working models such as the “Spotify model,” the helix model does not hand over complete control of resources to the value creation leads, thereby avoiding the pitfall of having a workforce that feels transient, with members being shuffled too frequently. 

The helix model is a type of work and reporting structure that acknowledges the need for a certain degree of stability within teams to foster a sense of belonging and consistency. It is essential for value creation managers to adeptly navigate the dual demands of flexibility and stability. This means ensuring that although the organization benefits from the ability to swiftly reallocate resources in response to changing priorities, a chaotic environment is not the result. 

Well-defined priorities and clear communication about the when and why of team adjustments are crucial to maintaining efficiency and effectiveness in the value creation process. This nuanced balance is what sets the helix model apart from other types of structures, providing a framework that supports agility without sacrificing the stability teams need to thrive.

“In one example, we implemented the helix in a global automotive supplier,” Weerda explained. “It helped the company in two key areas. First of all, the company needed to have its strategic priorities clear and fully aligned between the value creation and capability leaders in order to shift the resources across value creation areas, where they created most value. Secondly, it allowed the company high flexibility, for example, in merging different business units in a quick and efficient way.”

What It Takes to Implement a Helix Model Successfully 

With a growing trend toward breaking down organizational silos and distributing responsibilities across multiple leaders, such as with the helix model, companies should have not only the confidence but also the capability to adapt and make necessary modifications to their organizational structures. 

To achieve success in a helix organizational model, organizations can consider the following four principles, Weerda said:

• Align work priorities  with business objectives. This requires regular; for example, quarterly reassessment to ensure resources are aligned to strategic goals.
• Establish a skills ecosystem to capture the complete skills set of your workforce. This provides visibility into skills and worker interests and empowers you to flexibly allocate talent to the highest priority work.
• Embrace a collaborative approach to vital aspects of employee development. Both the capability manager and the value creation manager should contribute to performance assessments, career growth discussions, and compensation decisions. This increases collaboration and also provides a more comprehensive and balanced perspective on employees’ performance, driving a culture of continuous improvement and skills development. The helix model drives organizational effectiveness through the ability to offer a holistic view of individuals’ abilities, skills, and potential. 
• Connect the helix model to financial systems that incorporate transfer pricing and budgeting for specific projects or tasks. This is especially important as people are allocated to the capability units but staffed and budgeted in the value creation units. This requires a clearly defined cost allocation and transfer pricing logic. 

“Simply expecting individuals within an organization to behave differently without providing them with the necessary tools and guidance is a clear path to failure,” McKinsey’s Andy Fong said.

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