Organization 3.0 – How to Achieve Modern Agile Organization

Organization 1.0

Organizations are constantly evolving. In the 1970’s the most common organizational structure was the pyramid structure. It was deep, hierarchical, and full of power. Companies got strong bosses who lead such structure. Internally their approach was full of command and control, bureaucracy, and standardization.

organization 1.0Those pyramid hierarchical structures were not wrong in any way. They were the perfect solution to world industrialization and to the dynamics of business at that time. Most of the companies followed the best practices for a simple world, where problems can be classified as obvious, and applied a simple structure to address it. And it worked. Bosses got results. Companies started growing and became more successful.

IMG_0752The most common management tool was a carrot and a stick, because organizations believed that their employees are lazy slackers who can’t work without it. Most of the people were in a mood of tribal leadership 2 where the motto is “my life sucks”. Complaining all the time. Not happy, not motivated. Their only motivation to do something was driven by getting some bonus – a carrot, or because they were forced to – a stick.

Organization 2.0

Twenty years later, Organization 2.0 was here addressing the difficulty of the business world focusing on specialization, processes, and structure. Companies realized that the world is not simple any more, and the majority of problems can be classified as complicated.
As a result, they adopted complicated processes, focused on deep analysis, and invested in experts.

The belief in Organization 2.0 is that complicated problems need experienced individuals and detailed analysis. As a result, companies invested in learning and specialization. They began to grow. The work which used to be done by one person, now needed specific and dedicated positions. We’ve got a specialized department to deal with java, database, testing, architecture, analysis, documentation, customers, accounts, plans, and chair purchases.

organization 2.0Organizations are trying to create a process to describe everything, to have every possibility thought over. Companies create career paths and talk about motivation. They have spent months describing KPIs, but the more processes and specializations they had, the less responsibility and goal driven individuals they had. They were starving. They tried to cut on expenses, but that did not bring any long term success either.

So they dream about the previous stage, where it was much easier to manage resources. At that time, managers had real power. They could make decisions. They could force people to work. They could use the carrot and the stick. It was so simple – no need for committees, no need to call a meeting for every single detail. At that time, allocation of individual resources did not cost most of their time.

Leader-follower leadership styleThe pressure on individuals to make themselves more successful, better, and smarter than others was huge. “What if my colleague is be better in the performance review?” “What if I am not promoted in two years?” It leads to a culture that emphasizes own goals over the organizational ones. Most of the managers and experts live in the third level of the tribal leadership model, where they believe that “I’m great, but you are not.” So they treat their employees and colleagues with little respect or trust. This leads to the leadership style of “leader-follower”, where the managers decide, and the people below them just do the job. No initiative is expected. People just follow the process and do what is ordered.

Organization 3.0

Nowadays, when the world is not complicated anymore, neither Organization 1.0 nor Organization 2.0 can address its full complexity. We have realized that such complexity needs a very different approach that can keep up with business dynamics. The Agile environment brings Organization, 3.0 which builds on teams instead of individuals, on different styles of leadership, and on intensive collaboration through the dynamic network structure. We need to completely change the leadership style, create partnerships, enforce self-organization, enforce real responsibility and ownership, enforce trust and transparency, and build the organization as a network structure which is flexible enough so that it can effectively respond to change. Decentralization is taking over, and is bringing a certain level of autonomy to self-organized systems.

Agile Organization - organization 3.0

Instead of being a huge tanker, you can imagine the Organization 3.0 as a flotilla of smaller boats, going into the same direction, living in the same context, having the same values, but making some decisions differently based on the situation.

The Organization 3.0 is a true Agile organization. In order to build it, you need to apply a different leadership style of “leader-leader”, which supports growth of people, instead of “leader-follower” which is so common in Organization 1.0 and Organization 2.0. Hand in hand with this new leadership style, you need to create a culture of tribal leadership “We are great!” where the focus is not on the individuals but on the systems and teams.

Leader-leader leadership style

Organizations are complex, as they have to deal with people’s behavior. People are not predictable. Every time we tried to make them behave in a predictable way, we failed. A modern Agile organization is built from people. It is a collaborative, creative, and adaptive network. It’s a sphere built from autonomous systems which are connected to each other, so they influence themselves but still keep consistent. Such a change of mindset is a huge mental challenge for most organizations.

So how to start?

Modern Agile Organization
Modern Agile Organization

– Help all people to become better leaders by applying the “leader-leader” leadership style, and build a culture of tribal leadership: “We are great!”
– Decentralize, build networks and communities.
– Allow autonomy in a well-defined context.
– Read my book The Great ScrumMaster, which is a guidebook not only for ScrumMasters, but also for leaders of any organization who want to become an Organization 3.0.

You can see my talk Agile Organization – Organization 3.0 at AGILEEE Conference 2016:

Agile at Saigon, Vietnam

I had an opportunity to spend some time with teams in Vietnam. Explain them Agile and implement Scrum process, bring in the understanding of it, and help them to apply it. It’s always good to travel for your work to some nice places, and Saigon is indeed very nice city. Very friendly people. How was it? Quite different. The way of explaining things needed many detail examples, however there were fewer problems with having people accept the whole idea.  The most difficult part was I guess to explain the agile mindset, implement agile culture. They always used to be organized by strict hierarchy. Who reports to whom. And now we had a cross functional teams consist of both developers and testers, so who do I report now? Who is going to assign me new tasks? And all those questions. If you for some reason put one person out of the teams as a shared resource, he immediately stop working and did just management decisions from that time. When we asked why, it’s because only the team members are here to do the work. And I’m now more important. So I don’t do any usual daily job. On the other hand, once they understood the process, they follow it. They don’t discuss if they should or not, no complains that they are corporation with specific habits so why they should change them.  Once you explain it so they understood they do their best to make it working.

Agile community

I’ve always tried to meet with local community while I’m traveling. It’s fun. They sometimes reply and you organize something together, sometimes there is no response at all. Agile Vietnam was a surprise; they have extremely active Facebook community. I’ve sent an introduction and in a few seconds I’ve got several replies. So already the first night at Saigon I’ve met with a group of people to talk about startups. Small group, not really from IT environment, but trying to learn new thinks, improve English, it was nice evening.

The next day I arrived on Barcamp. Huge event with 3500 people registered, kind of unconference where attendees are voting for presentation to be presented. I was talking about agile implementations, some British lady about bringing Broadway Theater to Saigon. You can talk about anything. Audience is deciding whether it is interesting or not.

The last event I had there for the community was free Starting Scrum workshop. One afternoon the organizers of Agile Vietnam invited everyone to Saigon Hub. And we had two hours to try basic Scrum principles. I introduced a game where the teams were building a high tower from marshmallow and spaghetti. It was fun. The very good think is the game was working well even in this different culture. They did a great job, and learned a lot about how Scrum process works with respect of the delivery of PSP at the end of every Sprint, communication to the customer, team development.

Back home

So to summarize my experiences, I would love to come back to Vietnam or another interesting country for work. It’s different, it’s fun, and it’s working. The training itself will not make any big difference to them. To change their way of working and mindset you have to be there, you have to spent time and help them understand and apply the theory. This is something which I as an agile coach can help them.

Agile Adoption Story – Common Mistakes (part 6)

And finally, to finish the agile adoption story, even though the team is after all able to find their way to communicate, share knowhow, learn from each other, and cooperate, there is another obstacle. Surprisingly it’s not outside the company but in the business unit internally.

Company doesn’t need to change

The company doesn’t need any change. It used to be working good for many years, and if we had observed any problems, they were indeed located in the ICT, so why should we change the business unit? Isn’t Scrum called software development methodology?

Oh, yes, Scrum is business driven, but here are the requirements, so take them as they are and if you need to make any User Stories out of them, sure, feel free to do it. But we are not really interested in your internal processes so don’t bother us. However, we expect you to finish all this work on time.

So the teams are desperate again. Unless they got Product Owner, who is willing to become part of their team, and share the risk and success with them, they can’t proceed with real Scrum. They can’t take all responsibility and gain success in return.

Unfortunately, some get frustrated from the lack of business support and still complaining “Agile is not for us”. We are different, we have too complex product, we are too big/small to implement agile. Our customers are like this and that, and you know, agile is great, just for a different company.

Agile Adoption Story – Common Mistakes (part 5)

So what happened next in the agile adoption story? John starts to be really frustrated. Is all agile just a rumor? Or did we make any fundamental mistake?

It’s just a process, follow it!

So he went to the team, be really strong and say “It’s just a process so follow it”. They were weak in following the practices; they abandon most of the particular practices. So somewhere there must have been the problem. If most of the companies reporting agile works great, why agile shouldn’t work for us.  That’s because they are still complaining, asking for some change… They have a team fully allocated team now as they requested, so what would they need next? Let’s make a brainstorming in our management group and find out how the individual practices are supposed to be implemented. Then use them and make sure they are not adopting them according to their preferences. Let’s make sure Scrum Master controls all the activities, is strong enough and able to decide instead of the weak team. Let’s make him personally responsible for the team ability to deliver, quality and overall team health. We can put it into his KPIs.

However, the given process, regardless how good it was invented, could not ever bring any commitment, understanding and responsibility. The people just pretending they are following it and keep finding some sideways and complains. Finally, when you asked them, they keep saying “Agile is not for us”. We are different, we have too complex product, we are too big/small to implement agile. Our customers are like this and that, and you know, agile is great, just for a different company.

 

 

Agile Adoption Story – Common Mistakes (part 4)

But John still feels we should continue with agile adoption process started in previews articles of agile adoption story. It’s not going well so far, however, we just spent some money on training so we should give it a try. The project manager even if he is now called Scrum Master is keeping the common practices; we had still the same allocation system and organization structure. So when the Scrum Master got one-one meeting with John, he must admit Scrum process adoption has some issues ant it’s not really successful so far. But as John needs any improvement, he finally asked: “ok, so what needs to be changed in order to make Scrum working in our environment?”  And the Scrum Master selects the most crucial thing which bothered him – the allocation of the people.

Group of people makes team

Scrum is based on team cooperation and collaboration, so how should we use Scrum in the current conditions where we never know in front what time we got resources, people are allocated in front and took out of the project without any in front notice. They are sitting somewhere in the office matrix without any direct connection to the project. So let’s imagine they are just because of Scrum process moved to one shared place and from that time they are called “team”.

How this could work? Starting from the university, those highly specialized engineers were learned they are good enough to work individually on their tasks; any help offered there was called cheating. And now, they should work together? Even more in the company where were built strong silos called development department, testing department, and so on. And those silos have different managers with different goals. Those managers usually don’t like Scrum at all, as they had to delegate their responsibility and got less direct influence on the individuals.

However, the particular engineers happen to be sitting together in one room, having a Scrum Master, who is trying to sell agile to them. In a reply, he is often hearing questions like why do we have to talk so much, why should we select what are we going to finish? Just tell us what to do and keep us working. We are specialists and so we can’t lose our expertise in sharing knowhow.

So finally after some time, the Scrum Master is in John’s office saying “Agile is not for us”. We are different, we have too complex product, we are too big/small to implement agile. Our customers are like this and that, and you know, agile is great, just for a different company.

 

Agile Adoption Story – Common Mistakes (part 2)

To continue with the agile adoption story…  John is sitting in his office, waiting for the measurements and results and looking forward to the great results of the new process called Scrum.

We can use just a few practices

But what happen in the team meanwhile. They started to read all the books and blogs, get known some theory. And get a few practices to follow: Standup meeting, Product Backlog, Sprint Backlog, Customer Demo, Retrospective, User Stories,… but what actually happen. The retrospective didn’t seem useful enough to be made part of their process as they know each other well and even if they have some problem they feel they are solving it right away. And, more than that, they have the lessons learnt. No one is learning from those, but they still believe they are useful. So why should they do any retrospective, right?

Making a Product Backlog is a strange thing as well, as the business people don’t have any time they can ever spent on such activity, their only concern is to get all they want to as fast as possible without the necessity to described it well in front. They are quite happy to hear the team is making a commitment and deliver all they promised on time. As a result of that, team is not willing to take any responsibility and prefer the technical tasks instead of user stories.

So finally Standup is the only one practice which preserved in the team. They meet every day, talking about what they had been doing, who they had been talking, but usually missing any day commitment and description of any finished work.  As they don’t understand the reason of the followed Scrum practices, they don’t like them and felt the time is spent completely pointless. “The Scrum is just about meetings, we should better work than follow those useless practices“.

As the time goes, they abandoned most of the practices, but still they have those huge expectations of high efficiency, flexibility, improved customer satisfaction and team health. But apparently, no one of those can be seen within a team.

Finally, when John asked how the Scrum goes, he is surprised to hear that “Agile is not for us”. We are different, we have too complex product, we are too big/small to implement agile. Our customers are like this and that, and you know, agile is great, just for a different company.

Agile Adoption Story – Common Mistakes (part 1)

Companies have different reasons to move to agile, some are good enough, and some will never work. Some believe that agile is a silver bullet so they start without understanding; with high expectation all their problems will be solved by using for example Scrum. It’s not always any idealistic dreamers, they are well educated managers, with many years of ICT experience. But they are very upset hearing they must put some effort into the system in order to get exceptional output. They have to change and change is difficult, exhausting, long-term work.

I’m not saying you saw just the following mistakes around you, but those are the most common, and to some point of view the most critical from all I’m seeing in the companies around me.

Agile is new and cool, let’s start!

First type of the problem I’m facing in the companies is someone who is very enthusiastic about agile. The person, John for instance, is not any expert on agile, has no personal experiences, no close friends or colleagues using it, but he heard somewhere that agile is more efficient and flexible. And he saw those problems on the projects. The company is struggling from poor efficiency and inflexibility already for couple years. They already tried pretty much everything. They changed the project managers, make their processes strict and well described, implemented ISO, sent some project people to do PMI certification, and still got no real improvement. And yes, last year, they changed the bonus structure and made the fix salary low and high bonuses. Still no improvement; surprisingly it’s even worth it used to be few years ago.

And then, John discovered there is agile, which is supposed solve all problems they are facing. Isn’t that great? So what shall we do? Let’s read about it and start. Agile means Scrum. And Scrum, that’s just a few practices. So let’s start using them. And make sure you don’t bother me with any real change inside our company. Keep the organization structure as it is, keep all our processes, and keep the roles. Just give the business opportunity to say what they want to and then make sure you deliver it on time. And take care you are more efficient as you were, as I’m going to compare the mandays spent.

How it usually ends? John, and everybody else, is frustrated and saying “Agile is not for us”. We are different, we have too complex product, we are too big/small to implement agile. Our customers are like this and that, and you know, agile is great, just for a different company.