It started with some folks on the West Coast, claiming Waterfall project management was irrelevant for most of the IT projets they worked on. Theirs thoughts gave birth to the Agile Manifesto. From 2001 and on-going, Agile spread from California to the world, from IT to others activities, from principles to practices. But can Agile transform a corporation? The truth is that there are very few truly Agile companies. It is one thing to have some Agile teams scattered all over a company. It is another thing to design an Agile organization... Agile at scale is a mind shift. Here are reasons why we are far from it.
A company is a social unit of people with an identifiable boundary that is structured and managed to meet a collective goal. All companies have a governance structure that determines relationships between its different elements: structures, goals, strategy, activities, assigned tasks and people (both leadership and employees), coordination and control, incentive mechanisms, responsibilities. Structure and coordination are among the most fundamental choices: all companies require a formal design – including Agile ones. The first tradition of thinking about firms that is still coming to leaders' mind, sees them much as economists tend to, as rational efficiency-maximising systems, in which the effects of individual personalities are minimised. In this view, formal structures are rooted in plan-driven ways of running a business; they optimize for resource control and compliance rather than speed and agility. Indeed, contrast this with the Agile Manifesto "We value responding to change over following a plan". Taylor’s influential scientific management approach, set out in his Principles of Scientific Management (1911), focuses on the machine aspects of human work, using time-and-motion studies to determine the most efficient working patterns, taking away all discretion from the workers, and monitoring them to ensure compliance. Built on the same logic, bureaucracy has a comprehensible rule book covering all conceivable eventualities, ensuring that the work of each office will be carried out in a reliable and predictable way regardless of the person occupying that office. The bureaucratic professional is almost fully substitutable. Contrast this with the Agile manifesto "We value individuals and interactions over processes and tools". Bureaucracies were wonderful organisations for stability: from an information-processing point of pre-digital view, this made a lot of sense. In a stable environment, "good" corporate governance is about getting hundreds, if not thousands or hundreds of thousands, of employees all working, in coordination, towards the common goals. Governance processes help to ensure that managers are making appropriate business & financial decisions, managing staff and their deliverables, and adequately controlling quality processes. Contrast this with the Agile Manifesto "We value completed customer requirements over comprehensive documentation." The machine metaphor was useful. But this tended to translate into rigid structure, strong contracts and the centralisation of authority. One obvious feature of organisations is that, being made up of real human beings, they are opened to their environments and respond organically to environmental changes. Bureaucracies struggle with change, whether that be a changing environment, changing technologies, changing competition or simply sudden changes in customer demands. In fact, depending on the business context in which the company operates, one given structure may be more advantageous than another. In the VUCA world, the largest bottleneck to organisational agility is now that same bureaucracy!
Shifting metaphors could be a start
Summing up all these Agile lines and quotes would assert that an Agile organizational culture puts people (customers as well as employees) at the center, which engages and empowers everyone in the organization. What, then, is an organizational design that supports business agility? How the implementation of agile methods can impact organizational features such as organizational structures, teams’ leadership styles, and cultural values? It means shifting leaders' paradigms, from the old one (organizations as machines) to a new one: organizations as living organisms. Rather than seeing the organisation as a pyramid, with executives at the top, graduates and entry level positions at the bottom and everyone else in between; leaders should start to think of it has a "bee-hive" say management authors and Agile gurus : hundreds of cells, collaborating towards common goals and outcomes, but ultimately independent in action. An agile organizational design is dynamic, flexible, and ultimately optimizes for customer value (Agile Manifesto : we value customer collaboration over contract negotiation) rather than resources or leadership control. In an Agile organisation for instance, the bureaucratic hindrances can be overcome by giving individual teams the accountability and authority to engage with, and deliver to, their customers without undue interference within the bounds set by the customers’ requirements. An Agile organisation achieves this by reducing the structural hierarchy and minimising communication overheads through the creation of semi-autonomous, self-organising and cross-functional teams. For that to happen, leaders need to understand human networks (business and social), how to design and build them, how to collaborate across them, and how to nurture and sustain them. With a network of (semi) autonomous teams, Agile organizations maintain a stable structure at the top level but replace much of the traditional hierarchy with a flexible and scalable network of teams. Some top executives would name that "anarchy" ;) On a large scale, this type of network is a way to organize efforts by creating a balance between individual freedom and collective coordination. Organization would have a dense network of autonomous teams. Autonomous teams cannot be created simply by tearing down pyramidal hierarchies. Autonomy is a journey: wise leaders are unlikely to give teams free reign to start with. They aren't all ready for autonomy straight away. First, they will need training, direction and coaching because they need to operate with high demands in terms of harmonization (shared understanding), accountability, expertise, transparency and cooperation. Over time, they will become more skilled and experienced. As this happens, leaders can trust them with larger pieces of work, and with less supervision. Unlike traditional hierarchical or matrix management structures, cross-functional teams contain all the key skills required to deliver to the needs of their customers. They are responsible for the delivery of a product or service from design to completion, and should not need input from, or handover to, other teams at pre-determined stages. But putting developers, designers, sales, and business representatives together and telling them to do retrospectives does not necessarily mean success. Possible reasons of failure are communication problems, different working practices and goals, social loafing, and group thinking. To become cross functionally efficient, teams need to put continuous learning as a top priority and they need to learn how to learn. The best cross-functional teams also integrate the customer, or customer representative, within the team. The will significantly improve customer engagement and, by sharing the accountability for delivery, will improve the overall outcomes. Self-organising teams have the responsibility and authority to create a functional, internal team structure by replacing, retraining, or reorganising team members as needed. For instance, when the customer’s needs exceed the team’s current capabilities. The team should then self-organise by transferring, or in this example recruiting, staff with those skills into their team. in this case, trust is the key as the most important factor in developing empowered teams. Usual thinking from leaders is: "Staff must trust management". With an Agile mind, we could add "management must trust staff". And "customers must trust the organisation, and the organisation must trust their customers". Trust comes from communication and respect of all stakeholders. Right now, trust in organizations has hit "rock bottom".
Far from these considerations, where are we - really? The process of forming and implementing Agile teams with high autonomy, as well as the effective functioning of such teams, are not yet adequately addressed and understood in the context of large scale organizations. Agile organizations need a cohesive community with a common culture. Cultural norms are reinforced through positive peer behavior and influence in a high-trust environment, rather than through rules, processes, or hierarchy. An organisation that is positioned to adapt to the changing needs of their customers, needs a complementary organisational structure that is both efficient and highly functional. It takes a brave company to change their governance processes, let alone organisational structure, to encourage this. Even, those organisations that are willing to take the risk, and associated reward, involved in being an adaptive business will often apply both Agile management and Agile work practices but will disregard the importance of an Agile organisational structure. More often, the Agile organization remains in the limits of a division or research unit. Leadership in Agile organizations serves the people in the organization, empowering and developing them. Rather than planners, directors, and controllers, they become visionaries, architects, and coaches: more than a change of titles, a change of professional identity. This journey just started...