Agile Organisation: 12 steps of transition
In my previous article, I wrote to you about the importance of alignment and that agility is only one answer to a constantly changing environment.
Today, I’m going to share with one of our most essential tools: the “ORPO”. It is a snapshot of your business, a polaroid for those of my generation.
Watch how information flows through your business.
Ask the operational staff if they know where we are going and why?
Go back to management and look at the strategic plan. Ask if each member of the board is in phase. Go ahead and measure the deviations. In most of the cases, the turn already starts upstream and this from the origin. So when you get to the base, you ask yourself in what supernatural dimension you are.
Change is now just a marketing slogan. Most of the people agree that change is needed, very few want to make it.
As a coach, I work with stereotypes not to point fingers, but rather to help choose a path. You can decide to persevere in the traffic jam or to decide to pivot on that deviation. For me, if the choice is conscious, that suits me perfectly.
The tool:
During my experiments, I discovered eight organizational stereotypes allowing to identify in which model we are and which model could be realisable, or if you prefer, what is your acceptable level of agility (required agility or Requisite Agility ).
Stage “0”, the default situation when the company is not yet known
In red, the chain of command.
In green, the operations
In blue, the client.
The only thing known is possibly the organization chart.
The model is monolithic: some people think and some people who execute. In between, there are relays. The whole company serves the tip of the “iceberg”.
From the top to the bottom of the structure, the company is lacking alignment. The corporate strategy is imposed and becomes more and more difficult to understand from each layer of the organisational chart. The management communication model is complicated: each manager focuses on its expertise without taking the big picture into account. A single person owns the big picture. That person consolidates the information to have it “simple” for execution.
Operations are not engaged at work, and they are waiting for “simple” working items from management. “Team” is a slogan, and people are used to working in several teams, chapters, tribes or communities.
Value creation is used to be at a single management level. Operations are tools to serve that individual management level.
Chaos and Complicated are how agents (people) are interacting together. In my projects, besides instinct and experience, two measures are part of my tool-box: alignment and communication.
In “0”, there is no alignment:
- Management in “Complicated” is sharing expertise. What is understood as alignment is an agreement,
- Operations in “Chaos”. No shared goal, individualistic, no engagement, waiting on assignments.
Communication is measured like below:
Step “1”, We have a project manager but no knowledge of project management
Here, a project manager is appointed (in pink) to execute a task in parallel. He spends his time to get a little work capacity from experts or operational staff.
There is no collective work.
The project manager consolidates the different information and reports to his manager (red).
This manager reviews the data from the project manager to his superior in a “consolidated” manner. He is the only person authorized to interview the client.
The model remains monolithic but gives the impression of doing its job correctly because we use the right words. A lot of work is in progress, very little is completed, and very quickly, everyone is under pressure. Everyone realizes that the model does not work.
The project manager is a new layer added in the “waterfall” structure as “single-operational-person-of-contact” from the management. The new role is only assisting the real decision-maker on the top of the hierarchy.
Example. A manager decides to outsource the activities because the operations are too slow, and the costs explode. This one thus goes on tour abroad: Asia, Maghreb or Latin America. As the “resources” are inexpensive, the financial impact is minimized.
However, the provider seeking to “dump” his prices to be competitive must increase his volumes of services. This need to increase size will be achieved by increasing the number of customers to be served and by optimizing its capacity. In this case, it is a question of parallelizing the work.
The consequence is that the provider’s “resources” will have to be shared between different clients or, more clearly, the staff must be multitasking. The organizational model will be between (0) and (1).
The economy of scale will allow delayed time. However, projects will fall behind, and the quality will be lower. The total value creation budget will be identical or even higher on a larger time scale. As the responsibility is compartmentalized, the starting sponsor will already be on another project when the first is delivered.
In that example, most of the decisions taken are unilateral. It means taking the single from a single perspective: the costs performance.
Communication:
Recommendations: the intention of an agile organization has teams as profit centres and not costs centres. In that model, the manager should understand how the operations are working, notice what doesn’t work and start improving the existing system.
Step 2: a project approach. One project = a dedicated team
Set up a project-based organization. One project = one project team. The project manager works with a dedicated project team.
The team is separated from the organizational matrix for the duration of the project. Project budgets are under control.
The project manager always reports to his supervisor, and the client is still distant. An example: the project manager states to sponsor or a Program Manager. The manager communicates to the business department or to the salespeople who are in contact with the client.
The consciousness is raising that the organization is different from the structure. The structure remains monolithic and is based mainly on control and not value creation for the company. The project team is still considered a cost-centre.
The systems dynamics are the same as before. People into the team are learning to work together as an entity. At this stage, we can discover that team members are multi-tasking through project works, supports and other transactions.
Communication:
Step 3: the beginnings of a proto-agile
The model “2” evolves by separating scope and coordination. The project manager grows into two distinct roles:
-the Product Owner who focuses on product or solution development in a functional way
- and the Scrum Master who is in charge of team coordination.
The Scrum Master is protecting the team from external distractions, including unplanned demands and requests from management. The team members are detached from their lines-of-business, and they are forming a new entity “the team”.
Work is still not yet clearly sorted in program, projects and transactions. The first work paradigm of “work assigned to individuals” has switched to “work is assigned to the team”.
Management is still behaving in a complicated manner: subject matter experts talking with each and a single person consolidating the information.
Operations are starting working as a team and interacting with each other to solve problems. Some team members need more time to adjust to that new working model.
Communication
Team members are communicating together through higher collaboration. Most of the communication remains planned and controlled through limited tooling and rules.
No change at management yet and line managers are trying to take over the team in their line of business,
Step 4: improve proto-agile
The Product Owner understands that he must work directly with the client. At the outset, he thought that the client was the internal customer. Then he realized the various intermediaries modified that information. As a result, the requests were not always consistent.
The customer might the one paying for the solution. It is different from someone ordering a solution. Ordering can be a consequence of cascading decision making; on the opposite, one person pays the bill.
While working directly with the client, the information has become much clearer and the scope reduced to meet client needs and not the constraints of the structure.
The Scrum Master acted on the organisational transformation unbundling the team entirely from the line of business. Crossover activities become genuine. The demand is still a bit confusing. Due to the distance from the customer, the team is asking for feedback to understand better the needs.
The Scrum roles are not understood at that level. The Product Owner is “voice of the customer” and acting more like a business analyst. On the other hand, the Scrum Master is more “voice of the management” and team lead.
The interactions within the team (communication) is improved: moving from planned to opportunistic communication. It means that team members are starting sharing-as-you-go and get access to project related informations.
The Scrum Master is starting filtering “distracting” information coming from the enterprise.
The Product Owner is outside of the team and working mostly with the customer.
Step 5: Proto-scrum
In “Proto-scrum”, you apply Scrum like a methodology in a linear manner:
- The roles
- The events
- The values
- The artefacts
In that stage, you use mechanically everything written in the nineteen pages of the scrum book.
While talking with the customer, the Product Owner realizes that the users (Pink) have not been identified. The customer manages his customers, and the Product Owner does not have access to them. He writes User Stories by putting himself in place of users.
Like in the early ages of Scrum, the Product Owner is not part of the “Agile team”, he or she is the “voice of the customer”, an artefact handing over requirements.
From a methodological perspective, the “Agile team” is reporting to the Product Owner.
The “Agile team” is mostly in a complex dynamic with some “chaos” moments in estimation as an example. At the end of the sprint, the team reports to the Product Owner in a “complicated” dynamic. The expected feedback is the approval of “done” work and not the “inspect-and-adapt” of the stakeholders. That feedback might come later in the next sprint when the Product Owner reported the outcomes to the customer, users.
Communication
The “Agile team” is starting to having a more spontaneous communication in the team. The Scrum master is filtering by clustering the information outside the organisation.
The Product Owner´s communication has become more planned. He or she is now in the front line with the customer and also represents the company.
Step 6: Old Scrum
Here are the origins of Scrum. The Product Owner is the voice of the customer. As the users are identified, and the Product Owner has access to the users, he can create realistic and testable user stories.
The dynamics are similar than the previous representation. The Product Owner is shifting from a management position to a collaborative position. While focusing on customer´s needs, the scope has been reduced. To ensure the delivery of continuous flow of value to the customer, the Product Owner understands that the key is to balance demand with capacity.
Communication
The communication is becoming more opportunistic leveraged by the necessity of transparency provided by the methodology,
Step 7: Scrum
The Product Owner is part of the team. The team moves from a technical team to a solution-oriented team. The Product Owner identifies new requests, the progress of applications in development and helps prioritize support activities for old versions. It has a life cycle management strategy and can measure return on investment.
The team becomes a profit centre and functions as an internal start-up.
Communication
The Scrum framework designs the conditions for better communication between “Agile” team members and stakeholders. Scrum Masters and Agile coaches are taking attention about cohesion (clarity of purpose) and alignment (coherence).
The level of collaboration is high with a “simple” level of formalisation. The team (green) have a lower level of formalisation, middle management (Scrum Master and Product Owner) have still to deal with reporting and non “agile” people outside of the system.
Step 8 : Agile
The team, the client and the users are the same “system”. The level of collaboration is intense, information is shared, and meetings are collaborative.
One has just created an “agile-system” where everyone shares a common goal of performance and collaboration.
The “Agile” team dynamics are concentrating most of the efforts in “complex”. From time-to-time, alignment is needed to consolidate the outcomes. From that consolidation, a collective agreement is defined for the next steps.
Communication
The communication level is “free”. The information is sharing in the system first before getting outside the enterprise.
Step 9 : The Switch
Management is switching from a directive position to a supportive place. Once the “Agile” team has merged with the “Customer/User” system, new tensions will emerge in the company. The Systems are self-managed, and the only input that leaders are bringing are on the corporate strategy and compliance issues.
The “Structure” system is linear, and the “Organization” is a non-linear and “emergent” agile system. Very rapidly, members of the Structure are noticing that the Agile System is a high performing one, and they have two options: be part of it or play against it.
Playing against is what happens most of the time. Management is using its power to gain control of the “Organization” with old management tricks:
-adding non asked resources in the system (diluting),
- asking for process optimization (over-processing),
- removing team members,
- changing agile coaches,
- initiating new methodologies,
- misusing the naming convention,
- etc.
Be part of it is the hidden agenda. In the first step of the Switch, the management is becoming an agile team doing management for one or more agile teams. Doing management means to handle budgeting issues, ensuring the development strategy, coordinating the organizational transformation at Enterprise Level.
The management team dynamics are spotting in “chaos”. It means that each of the managers has its agenda. That plan isn’t aligned with the other team members.
Communication
The information isn’t shared even between team members. In that phase, the team is in construction.
Step 10 : The Hack
All the layers between the “Management” team have been removed. The team is reporting directly to the board of directors.
The managers are now organising themselves in a Scrum manner: the development team, one Product Owner, one Scrum Master. The team improves the residues from the line of business. It reorganises itself around a portfolio of products or services.
The Product Owner owns the team solution at a higher level than operational teams does.
The Scrum Master is leading the change and keeps the overview of OX and EX. He or she is also people manager of the program.
The “management” team is behaving like any “agile” team in stage seven.
Communication
The interactions between members in the system and the other sub-systems are more opportunistic. They are mostly event-based. The work is structured between programs, projects and transactions.
The information is transparent and accessible from anywhere. Most decisions are the results of collective decision-making. The primary behaviour in the system is based on win/win negotiation. The agile managers’ targets are clean and clear communication. They are doing their best to be recognised as part of the system.
11. The Agile Organisation
The last structural bottleneck has been removed. The board of directors is acting as an agile team in charge of the company. Managers from the other teams have budgets to run new value creation projects or programs for the company. Most of the bureaucracy has been automatised. Experts are coaching teams in their specific domains. People are considered as assets and the board of directors gives the tools to get them better.
The board of directors is managing the company like a venture-capital. Teams are considered as internal start-ups. The merger-acquisition process as shifted from an outside-in to an inside-out process.
Every team is a profit centre. Some teams does short term profits, others have long time goals. R&D is sharing monthly their findings to the crowd to initiate more innovation across the teams.
The dynamics are mostly in the complex area. Outcomes and goals are simple. Alignments discussions are in the complicated area, the alignment is simple. Chaos is used for brainstorming and individual add-ons to the new solution developed in Complex.
Chaos and Complex are used to address problems from different angles (typology).
Complicated and Simple are categorising the experiences from Complex as best practices, solutions or process (taxonomy).
Communication
12. The Extend
The agile organisational is spreading through the whole company, and becomes the new routine.
Because all people in the company learned self-organisation, accountability and resilience, the model will duplicate naturally.
Simple rules: the agile game has the same standards for all. The only difference is the pace (Scrum X).
Alignment is key. Continuous attention of team alignment, team/customer alignment, team/management alignment is the highest priority.
Separation: the teams are evolving, and they are not permanent. Separation is an option that every team member can use to join another group, to return to the hive, or join R&D.
Cohesion: the team are small systems. The work is flowing into the team. That gives freedom to individuals for new experimentations.
Avoidance: teams are built around a shared goal. Scrum Master or Agile Coaches are caring about obstacles and other hints.
The organisational model replicates the digital platform model. That model has a “platform” allowing transactions (swarms) with simple rules managed by the board of directors (plexus). In this document, I also use the term “hive” for the platform. The “hive” is the place where you are nesting. Sometimes you leave the nest to feed it, and you are coming back.
Conclusion
The eight steps are those of an “agile” transition. Each phase has a specific operating mode allowing the abandonment of obsolete models.
At agile², we transpose this model whatever the size of the “hive” because the “swarms” have a limited scale.
These models are the organizational “coaching” supports we have to “negotiate” the objectives with all the stakeholders. These models are not forced but points of indications allowing us to detect the emerging organizational behaviours.
When SAP IT Corporate Finance (200 p) was transformed, when we left, the organization was in phase 5 after two years. After a year, it was still in step 5 with a few round trips in phase 4. Management proposed other approaches such as LESS or SAFe but without success. The performance indicators of the teams increased by 400% during our presence. The pace remained the same or slightly better despite significant interference from the size of the structure.
During the transformation of SAP Finance (4000 p), internal change agents were trained with our Agile Coach program, and the indicators have been implemented.
