Insights on Leadership & Innovation • Gene Kim & Charles Humble

Coupling between teams and components is a key challenge in organizations - when everything is tightly coupled, small changes require heroic efforts and coordination becomes extremely difficult

The concept of “social circuitry” describes how information and decisions flow through an organization - leaders need to create the right conditions and connections for effective work

Organizations have three key layers:

• Layer 1: Technical objects and tools
• Layer 2: Tools used to do the work
• Layer 3: Processes, procedures and organizational “wiring”

To improve organizational performance, focus on:

• Locality and simplicity
• Enabling independence of action
• Reducing coupling between teams
• Creating psychological safety
• Supporting experimentation and learning

“Slowification” is sometimes necessary - slowing down deliberately to learn, prepare and ultimately go faster

Architecture decisions significantly impact team productivity and organizational performance - modularization and loose coupling enable teams to work independently

Leaders are responsible for creating conditions where people can do their best work easily and safely, not just directing work

High-performing organizations need both fast execution mode and slower problem-solving/learning mode

Small changes in organizational structure and processes can have major impacts on outcomes and performance

Communication patterns and coordination needs between teams are key indicators of organizational health - when everything requires coordination, the system is too tightly coupled