Maturity Model for Kane's Law

I've never been a big fan of maturity models, as I often find them too abstract and the boundaries between stages feel arbitrary. At the same time, I understand the need for them; people want a clear sense of progress and a vision for what's next, which these models provide.

So, I developed my own. The framework I'm sharing in this post, which is taken from Chapter 14, is my take on what a useful model should be. While I have some reservations, I feel it’s a solid representation of an organization's transition from a rigid hierarchy to a decentralized network.

Most organizations I work with are somewhere between Stage 2 and Stage 3. It's important to recognise that navigating this phase alone can take several years of hard work. Let's jump in ...

The Kane’s Law Maturity Model breaks down the journey of structural evolution into distinct stages. Each stage represents a level of organizational power distribution, decision-making speed, and innovation capability. The maturity model provides a framework for understanding where your organization is today and what steps are needed to move toward greater adaptability and decentralization (Kane, 2015).

Stage 1: Rigid Hierarchical Structure

At the base level of the maturity model is the rigid hierarchical structure. In this stage, organizations are built around top-down control with centralized decision-making. Power is concentrated at the upper levels of the hierarchy, and middle management acts as the enforcers of the status quo (Mintzberg, 1979).

Key Characteristics:

• Slow decision-making: Approvals must pass through multiple layers of management.

• Limited innovation: Employees at the lower levels of the organization lack the autonomy to take risks or propose new ideas.

• Siloed communication: Departments operate in isolation, making it difficult for information and innovation to flow across the organization.

Challenges: Organizations in this stage often struggle with resistance to change, as middle managers have a vested interest in maintaining control. Strategic alignment is weak, as decision-makers are disconnected from operational realities (Kotter, 1996).

Stage 2: Emerging Flexibility

Organizations in this stage are starting to recognize the need for more agility and decentralization, but structural change is still in its early stages. Some departments or teams may experiment with more cross-functional collaboration, but the overall power structure remains largely centralized (Galbraith, 2014).

Key Characteristics:

• Partial decentralization: Some teams may be given more autonomy, but decision-making is still largely controlled by senior management.

• Isolated innovation: Innovation occurs in pockets but is not yet ingrained in the organizational culture.

• Initial steps toward agility: The organization may experiment with Agile practices, but full-scale adoption is slow due to cultural and structural barriers.

Challenges: Middle management resistance and entrenched hierarchies remain significant barriers to full decentralization. Innovation may be viewed as risky, and decision-making is still slow in most areas (Kane, 2015).

Stage 3: Agile but Siloed

At this stage, the organization has begun to adopt Agile methodologies and decentralized decision-making in key areas. Teams are more cross-functional, and silos are starting to break down, but there is still a lack of coordination between teams, and certain parts of the organization may continue to operate in a traditional, hierarchical manner (Denning, 2018).

Key Characteristics:

• Decentralized teams: Teams have more autonomy, especially in product development and customer-facing functions.

• Faster decision-making: Teams can make decisions without needing extensive approvals from senior management.

• Collaboration within silos: Teams work well within their functions, but cross-departmental collaboration remains limited.

Challenges: While decision-making has improved at the team level, the organization may still struggle with interdepartmental communication and alignment of strategic goals across teams. Middle management may still exert control in certain areas, limiting full-scale agility (Kotter, 1996).

Stage 4: Integrated Agile Organization

In this stage, the organization has achieved a high degree of structural flexibility. Decision-making is decentralized across the organization, and teams are empowered to innovate, collaborate, and adapt quickly. Silos have been broken down, and cross-functional teams are the norm. The organization is able to align its strategy with its structure, fostering continuous innovation and adaptability (Hamel, 2007).

Key Characteristics:

• Full decentralization: Decision-making authority is distributed across all levels, empowering teams to make fast, informed decisions.

• Cross-functional collaboration: Teams work fluidly across departments, breaking down barriers to communication and innovation.

• Continuous learning and innovation: The organization fosters a culture of experimentation and is continuously learning from both successes and failures.

Challenges: While the organization is adaptable and innovative, alignment between teams and overall strategic goals must be maintained to ensure that decentralization does not lead to fragmentation (Galbraith, 2014).

Stage 5: Fully Adaptive and Decentralized Organization

At the top of the Kane’s Law Maturity Model is the fully adaptive and decentralized organization. In this stage, the organization operates as a living system where power is not only decentralized but fluid, allowing the organization to reconfigure itself in response to external changes. Teams are autonomous, but they are deeply aligned with the organization’s vision, values, and strategic goals (Denning, 2018).

Key Characteristics:

• Dynamic decision-making: The organization is able to rapidly shift resources, teams, and strategies in response to market changes.

• Fluid structure: Teams form and dissolve as needed to address emerging challenges and opportunities. The organizational structure is no longer fixed but adaptive.

• Empowered innovation: Every employee is empowered to innovate, and the organization continuously learns and evolves based on internal and external feedback.

Challenges: At this level, the primary challenge is ensuring that the fluid structure does not lead to a loss of coherence. Leaders must balance adaptability with strategic alignment to ensure long-term sustainability (Hamel, 2007).

Assessing Where an Organization Stands in the Maturity Model

To determine where your organization stands on the Kane’s Law Maturity Model, leaders can conduct an assessment based on key indicators of decision-making authority, power distribution, and collaboration (Galbraith, 2014).

Questions for Assessment:

• How decentralized is decision-making? Are decisions made at the top, or are teams empowered to make decisions independently?

• How quickly can teams respond to changes in the market? Is the organization flexible enough to pivot when needed, or is change slowed by hierarchical barriers?

• How well do teams collaborate across functions? Are there silos that hinder communication, or is collaboration embedded in the organization’s culture?

• How aligned is the structure with the organization’s strategy? Is the current structure helping or hindering the execution of strategic goals?

Based on the answers to these questions, leaders can determine which stage of the maturity model their organization falls into and identify the key barriers to moving to the next stage.