LitheBlog

Agile insights from LitheSpeed
8
Mar

Agile Organizational Design (or Redesign)

I’ve heard one question a lot lately: does my company need to reorg in order to be agile?

The simple answer; not necessarily, though it can certainly help in some cases.  Companies can lessen the need for full structural reorganization by changing how teams are allocated against work and tweaking the role of management.

One of the broadest general changes that agility tends to infer is a better merging of business and technology functions. In today’s world, technology is not a simple service, but a fundamental and proactive tool for learning about the market and adapting quickly. There are several specific ways in which this basic idea has been expressed, but some consistent core patterns emerge:

  • Stable crossfunctional teams pull from dynamic backlogs
  • Persistent value streams rather than projects deliver core business capabilities
  • Managers lead and mentor people while ScrumMasters & Product Owners lead projects

 

Changing How Teams Are Allocated Against Work

Agile teams need crossfunctional representation; for instance, development, analysis and testing capabilities would generally be contained in a single team. So, if separate teams are these functions currently exist, reorganization of team structure is likely needed.

Teams should also be persistent and stable to the degree possible; this allows them to better take advantage of the gelling they enjoy when working together, and allows for fast starts to new initiatives. This means bringing the work to the teams rather than the other way around.

Many organizations are starting to align these stable teams against product or service lines, rather than forming them around temporary projects. This is expressed in the #NoProjects movement which my colleague Roland Cuellar has described, and a common way to implement it is to describe value streams for the major capabilities the organization requires. Value streams are recommended in the Scaled Agile Framework as well, in which groups of agile teams deliver against one or more value streams continuously through Agile Release Trains.

 

The Changing Role of Management

While most agile teams have crossfunctional representation (e.g. development, analysis, testing), the team members representing these functions tend to keep their existing managers. The role of managers might also change, in a shift to a core support role for their people and the crafts they represent, while moving away from having any real involvement on the projects themselves. Their people would work in various agile teams, but leadership positions like the ScrumMaster and PO would drive and track project work, while functional management would focus on personal development and support activities.

 

Jeff Sutherland’s Scrum at Scale framework encourages managers to:

  • Provide clear and challenging goals for the teams
  • Eliminate organizational debt – identify and remove waste
  • Create a business plan that works
  • Provide all resources the teams need
  • Identify and remove impediments for the teams
  • Know velocity of teams
  • Eliminate technical debt
  • Hold Product Owners accountable for value delivered per point
  • Hold Scrum Masters accountable for measurable process improvement and team happiness

In essence, management becomes focused on inspiring, supporting and growing people, rather than directing them and their work.

 

Agile Organizational Patterns in Action

ING Direct recently adopted what people have taken to calling the “Spotify model”: http://www.mckinsey.com/industries/financial-services/our-insights/ings-agile-transformation.  Here, line management drives communities of practice known as “chapters”, and agile teams are relabeled as “squads.” Tribes are groups of teams, and guilds are communities of interest.  Managers use chapters and guilds to connect their people across scrum teams and grow organizational knowledge.

Here’s another describing a similar structure (one quite like what we have at LitheSpeed, actually): http://www.mckinsey.com/business-functions/organization/our-insights/adhocracy-for-an-agile-age

Another fascinating pattern is self-selection, as seen at OPower and elsewhere; again, there isn’t necessarily a structural reorganization, but rather adjustments to project inception and team formation.

 

To Reorg or Not?

So, many companies are indeed choosing to reorganize, and to good effect. But some simple adjustments to how teams are structured, how they are aligned against work and how managers behave can go a long way by themselves.


LitheSpeed is implementing these patterns at some of our largest clients today. Look for more stories soon!

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