Many organisations are transforming into agile organisations nowadays. This is often born out of necessity to be able to cope with fast changes in the context of the organisation. In order to be able to quickly adapt to those changing circumstances a transformation is started where multi-disciplined teams are the foundation of the delivery organisation. For large organisations the concept of Aligned Autonomy is chosen as a way to keep focus for the numerous teams on the corporate strategy. Bringing back the number of reporting layers to the minimum as needed for the agile delivery organisation is an absolute requirement for a successful transformation.
One of the often mentioned triggers for a transformation towards an agile delivery organisation is to create a shorter time to market. Over the years organisations become more and more siloed as a result of growth. These silo’s appear in many ways like Front-Office/Mid-Office/Back-Office or Business/IT or based on market segments. The tendency was that those silo’s created their own governance mechanisms with all kinds of departmental levels. As a result employees operating in such a silo could only oversee what was happening in their part of the organisation. This implies a disconnect for the majority of the employees between corporate mission/vision/strategy and their day-to-day responsibilities. The translation between corporate strategy into the purpose of an individual department was performed by a multi-layer management governance.
This fostered in the past at corporate level the notion that a mechanism was needed that could implement the strategic change in line with the corporate strategy. As a solution for that huge multi-year programmes were started with sometimes massive usage of external professionals at key roles in the programme organisation. On top of the already complex and siloed line organisation, an even more complex portfolio and programme organisation was created. The programme organisation created a multi-layer command-and-control governance. Decision-making was slow and the real progress reporting was often blurred as a consequence of the many layers and the exiting silo’s. There was in many cases a disconnect between what was happening in the programmes and the business-as-usual in the departments of the line organisation. So in the majority of the cases, the step towards using programmes as the most important instrument to implement strategic changes was not delivering up to promise.
So using programmes in itself didn’t solve the problem of creating a much shorter time to delivery.
Nowadays large organisations are becoming inspired by the way IT is making their change towards a much better performance towards business. Many large institutions in the financial and manufacturing industry were inspired and started to experiment on agile organisational models used in organisations that were agile by nature like Spotify, Amazon, Google, Zappos etc. The most successful experiments used a drastical restructuring of the delivery organisation. The delivery organisation is that part of the organisation where the products and services are delivered and maintained as asked for by the customers. And that is exactly where the need for ‘shorter time to market’ was expressed.
Combined with the principle that the organisation consists of numerous autonomous teams being the fundament of the organisation, the agile transformations started to re-build the organisational structure from the team-level. The challenge was to find the closest connection between the corporate part of the organisation where the mission/vision/strategy was maintained and the individual employees working in the teams.
In this article I will use the model of a delivery organisation based on the Spotify model but it also applies for organisations that use the SAFe framework.
If you want to create a situation in which a multi-disciplined team is felt like the home base for every individual you have to create a situation where:
- The team has a clear purpose;
- The team is a safe environment to operate, experiment and learn from mistakes;
- The purpose of the team is connected via the tribe purpose to the organisation purpose;
- There is 1 clear reporting on the WHAT (via the Product Owner role) and the HOW (via the Chapter Lead function).
As there are many multi-disciplined teams (squads) in large organisations, the need for clustering teams with a similar purpose in tribes and Centers-of-Expertise was implemented.
Besides this organisational structure with squads, chapters and tribes also processes were implemented that create the situation of aligned autonomy. A process like QBR is used to align the corporate priorities with the team product backlogs via the tribe level. A process like Obeya is used to monitor the progress during the quarter. In the Obeya process the iterative and incremental delivery in team sprints is monitored but is also constantly aligned with the actual performance in the market.
In organisations that operate on global level, there is often one additional layer implemented being at country level. As this could create double effort in similar tribes in various countries (for instance a Payment tribe per country in a bank), there is much emphasis on collaboration between those tribes. An alternative for this is the design of global tribes consisting of teams and chapters across the globe.
ING as an example made it part of the strategy that delivery teams in tribes work with the global perspective in mind. Combined with the appropriate IT strategy on components, this created a situation where teams make use of each other’s components. This was according to ING the reason why a new Retail Bank in The Philippines could be implemented from scratch in 10 months as 70% of the components needed came from already available components made by other teams of ING globally.
So the combination of a new organisational structure, combined with the processes for an aligned autonomy created the flexibility to quickly adapt to changing circumstances.
But this is not enough to make it all work. A very important third requirement is the switch from command-and-control leadership towards serving leadership. Leadership that facilitates the teams to the max and helps in translating corporate strategy into activities of the agile teams.
But what happened to all of the managers in the old organisation?
This is an important element to discuss in the transition towards the agile delivery organisation. At the moment that the new organisational structure becomes clear i.e. which tribes, chapters and squads are present in the new organisation, the selection and the assessment of the new leaders takes place. This is often done in a phased approach where the tribe leads are selected and assessed first, followed by the chapter leads.
Assessment of all leaders takes place on two main topics:
- Their agile mindset and leadership behaviour
- Their vision and knowledge on the content.
Because of the fact that the impact at the moment that the new organisation starts should not lead to an organisation that is not in control anymore, there is often a balance needed between disruptive and status-quo management assignments. So in general all previous staff at the various managerial levels can apply for a role in the new agile delivery organisation. The outcome of this selection and assessment process is that most middle managers find a new place in the organisation that fully uses their competences. Some managers will be assigned as tribe leads, some as chapter leads, some as agile coach and some as high valued team members.
A former manager that was best in class in a certain craftmanship usually prefers a chapter lead role. A former manager with excellent stakeholder engagement competences usually prefers a Product Owner role for a team. A former manager with excellent coaching competences usually prefers a role of Agile Coach.
So a lot of the previous middle managers end up in the new agile delivery organisation where they do not perform old-style management roles anymore but perform roles that add value for themselves and the organisation. In a lot of cases their old management role is now split into new roles of the agile delivery organisation.
Does that count for every former manager? No, some will not fit anymore in the new organisation and some will use the re-organisation as a trigger to make a career step in another direction.
Achieving the benefits of an agile delivery organisation can only happen if the old managerial structures are banned.
If only the number of organisational layers is created needed to establish an aligned autonomy of teams, combined with the related processes and mindset, the delivery organisation will become able to meet the requirement of a shorter time to market.
There is a connection between the teams and the strategic leadership, decision-making is real fast and the organisation fully benefits from an iterative and incremental way of working.
And last but not least; it creates the best place to be for professionals to continuously develop their craftmanship.
Henk Venema is an experienced consultant helping organizations in their transformation towards agile organizations.
He combines his experience on Programme- and Portfolio Management with his experience on large scale agile transformations.