management - Agile and Scrum Blog

Do we need CEO in Agile Organization?

Agile at the organizational level changes everything. I wrote here already about Agile HR, Agile Board of Directors, and Agile at the Executive Team Level. Let’s have a look at the top of the organization. Should it remain the same? Or shall we go one step further and change it as well?

Searching for an “agile mindset CEO” is frankly a nightmare. Everyone who tried it can confirm that. There are not many CEOs with enough Agile experience yet in the world and those few who has it are not likely looking for a job as they are usually quite happy in their current organization. So, no matter which executive search firm you choose, or what you write to the position description, the search firms are no real help here. Unless you already spent effort up front on growing the talent internally, you need huge luck to get someone who understands agile more than a basic theory. No matter how desperate you are searching for a CEO, this is still just a small obstacle, not the real reason for a structural change.

The real need for top-level change starts when most of the organization is having an agile mindset. The Agile transformation is about being agile. How many times you’ve heard this request: “How about if our management give us more support on your Agile journey?”, “How about if our executive team is Agile and don’t just push it to us?”, “How about if they practice the same way we work as well?”Would that make it a difference? Maybe. So why don’t we go one more step ahead and change from the top and become a role model for the entire organization? As the organization has changed and Agile is not solely the domain of the IT anymore, but the business agility got into every department, the need for a change at the top level is inevitable. Why do we need a CEO in the first place? Just because that’s how organizations always been? Shouldn’t we ‘eat our own lunch’ and change the way we work entirely? Shouldn’t we apply the same principles the team do? Sounds simple, right.

And as usually it is simple to understand, hard to do as it needs courage. Courage to say “We are going to be different.” We will have Organizational ScrumMaster and Organizational Product Owner instead of a CEO because it will be closer to the way we work at this organization, fits our values, and last but not least we believe it will help us to be more flexible and adaptive at the organizational level. And that’s worth of trying.

The Organizational ScrumMaster would be focusing on the right culture, mindset and structure, so we become high-performing innovative organizations which embraced agility, and Organizational Product Owner would be focusing externally to the business, vision a purpose to we know where are we heading and why and are value driven. Both roles need to respect each other and be open with each other, the same way as it is in a single Scrum team, as together they will be part of the Organizational Leadership Team, and the network structure of self-organizational teams. There are two roles in Scrum by a reason instead of one. When you ask people if they would suggest to combine them, no one feels it is a good idea. And at the top organizational level, we would still do it? The similar reasons are valid at this level as well. When you think about it, it fits the way we work much better, then a single CEO – supports the right organizational mindset, transparency, and collaboration, it is consistent with who we are.

From a legal perspective, it is perfectly possible, and it’s not that much work either. You might need to change the bylaws a little, but there is no reason why you can’t do it. From a hiring perspective, it’s much simpler, as you are not looking for that ‘superhero’ personality who would be great with both internal and external sides. Try it. As I said already, all you need is courage. And that’s one of the Scrum values anyway. Experiment, and from that stage inspect and adapt. Now, do I believe that this SM-CEO or PO-CEO will eventually make themselves out of job? No, I don’t. It’s the same as the team level. Even if the team is self-organized and knows the business well, there is still work for ScrumMaster and Product Owner. Similarly, at the organizational level, there is still a need for Organizational ScrumMaster and Organizational Product Owner even when the network of collaborative teams got self-organized, business value-driven, and customer-centric. The Organizational ScrumMaster and Organizational Product Owner would use Leader – Leader style to build other leaders around them, and if they are successful, the organization will become purpose driven where leadership will be emergent and structure liquid. The same way as it is in the Scrum team, the Organizational ScrumMaster and Organizational Product Owner will move from those who explain, tell and share, to those who coach, facilitate, and keep the system spinning. And that’s what is the Agile Leadership about.

From Good to Great: Radical Transparency

I started the series From Good to Great by advising you to find your own way of being Agile. The next blog focuses on radical transparency. Let’s be truthful for a moment, how many organizations you worked for have real transparency, and how many are hiding information behind the teams or department walls, encourage by processes and claimed necessity of being compliant. Lack of transparency is a strong weapon which eventually can kill any Agile transformation as it makes collaboration and self-organization almost impossible. Lack of transparency is a great friend of hierarchical structures supported by fear and politics. “If I’m the only one who has the information, no one can jeopardize my position, and I’m safe being manager… All I need to do to be promoted is wait and make sure that no big mistake happens.” Sound familiar?

Once you really mean it with your Agile journey, radical transparency is the key enabler. Together with the empowerment raising from the self-organization, it brings the energy and people start to take over the responsibility and ownership. They don’t wait until someone promote them to any function, they don’t wait for any orders. They take it over and collaborate on the solution.

Radical transparency is the key enabler of agility

Understand the Purpose

To understand the organizational vision and have a clear evolutionary purpose is crucial to successful collaboration and self-organization. In order to take over any initiative, people have to understand where are we heading, who are we, and who we don’t want to be. There is a very simple test. All you need to do is to take a random employee and ask him/her what is the vision/purpose/uniqueness of this organization. For simplicity, you can start with the executive leadership team to see if they didn’t lose the track of why they are there. 🙂 The good news is they usually know exactly what is the vision and can explain it in a very clear and engaging way. But when you do a cross-check across the organization, very likely there is a disconnect (usually several or even too many) which results in a very disruptive chaotic way of working. To fix it, storytelling is your best friend. Nothing can set up the stage better. Using serious of collaborative workshops like worldcafe, openspace, etc. involve people in co-creating the vision and help them to be part of it. Storytelling will set the directions. They need to own it, they need to believe it, they need to feel a need to be part of it. That’s the energy you need to begin. It brings innovative thinking, creativity, and empowerment, when people start offering help, ideas, and are ready to sacrifice personal goals in exchange for being part of something bigger.

Experiment, Inspect, Adapt

The next step is run experiments. At every level, you need to be transparent and openly share experiments at the early stage, and last but not least be ready to adapt through feedback. The downside is that before you learn how to collaborate and pass a test that you have the same understanding of the vision, it’s going to be very inefficient, and frustrating. “If we can just do it our way”, “they don’t understand it”, and “we know what to do so why shall we ask for feedback” people often say. But if you are strong enough and sustain the need for shortcut pre-baked solutions, very soon you see the results in higher collaboration, better understanding and some kind of harmony, which all over results in a high-performing environment.

Together with that, you need to run regular retrospectives and be transparent about the action steps. Share the backlog internally and externally. Simply there is no or very few information which needs to be hidden. If you believe you find any, try to double-check it by playing the “Five Why” and make sure you have a plan on what needs to be done so you can make it fully transparent.

Be Inclusive

The last necessary step on the radical transparency journey is to be inclusive. There is no such thing as a closed meeting. They shall be publicly visible with an open invitation so people can join if they are interested and have something to say. If there are many people, the facilitator can use some diverge and merge facilitation techniques, but no restriction shall be applied for the sake of efficiency.

It’s not about being fast without alignment, it’s about building alignment so you can be even faster.

Radical transparency is hard. You first need to have the courage to say things how they are, don’t be afraid to hear difficult feedback, have trust people will help you, and be ready to help others because after all, you all have the same vision, the same evolutionary purpose to achieve. It’s not easy but is a great investment and it will pay back in forming a highly adaptive (agile) high-performing organizations – the organizations which are formed to crack the challenges of the nowadays complex world.

Agile at executive team level

Agile can’t stay just at the team level. Agile transformation only creates disturbance and gap between the management and employees. And the more Agile the teams are, the bigger the disconnect is. Managers feel lost, forgotten and start to be frustrated that those self-organizing teams might eventually not need them. Part of the problem is they’ve never been part of any Agile or Scrum team themselves. They’ve seen them working, joining them for Reviews and listening to their stories, but that’s not the same. People need experience to understand a different way of work. You might still remember your first feeling, when someone told you that this Agile and Scrum will be great. “What?” you thought, this stupid process will never work – what if… At least I still remember how I felt several years back.

One important thing companies often forgot during their Agile transformation is how to get management on board. Managers deeply need their own experience with Agile and Scrum. They can’t just read about it. Otherwise you continue hear such funny remarks like “I got it, you are a team, you collaborate, but who is responsible?”, “We don’t need ScrumMasters, some developer can take it as a second role” or “We don’t need Product Owner, we have a product committee”. If you really mean the Agile transformation seriously, it’s time to change the way you implement it. It’s not just a different process decided by C-level executives and implemented without them noticing. It’s a significant change of the culture and mindset. So why don’t we start from the other side, forming the first team from executives. Let them experience Agile and Scrum. Make them feel the pain of being the group of individuals with their own goals, no common passion, no trust. Or no unifying purpose. Let them experience what the self-organization is about, how the cross-functionality works. Let them do their refinement, planning, standups, reviews, and retrospectives. It’s always fun. And the same way as such first pilot is painful and difficult for a product development team, it is even more painful for the executives. They would hate it. If they can, they would kick you out of the door. So be ready for that and have strong enough sponsor who understands that such painful experience is critical for the organizational success. It’s like any other exercise. Starting is difficult. We all are great at finding excuses why running today is just not a good idea. I will run tomorrow. Or when it’s the right weather. Actually, I don’t think I need to run, I’m just good without it. The other people need that, not me. Familiar? If you force yourself to start and develop a habit, it is fun and you would miss it if you skip that for even a day. The same with Scrum, the first time you experience the power of the true team spirit you never want to be back. No matter where you are in the company orgchart. It works the same way.

Unfortunately, executives are rarely going that way. There are two reasons. First, it is a painful journey. That’s why I’m not running every day. It’s not that bad that I would have to, right. The company is still fine. Not struggling enough. But maybe when that happens it’s too late to change. Second, most of the Agile Coaches need a day job. They care about 6+ months contracts. They are afraid of losing it if they would push too much. They often forgot that their job is not to please the customer, but to change them. Guide them through that painful experience with all the risks that they will not like it, and stop. Very often you hear from them “I know that this is not the way how it shall be but this is a corporation, you have to do it differently” so they still have PMOs, no Product Owners, weak ScrumMasters and not real teams either. It’s a much more painful experience for everyone involved then starting this fake transformation repeatedly all over again and again.

If you mean it, get a real Agile coach. Not a consultant. Find someone who would guide you how to do it. Not do it instead of you. Who would be with you once per Sprint / month / quarter. Do their intervention, show you the way where to focus next and let you exercise. Start with smaller pilots. The first Agile bubbles. The more bubbles you make, the better. Aim for our own experience and learning. Inspect and adapt. Don’t forget that your executive team forms one of the first bubbles. They have to learn in the first wave. If you do it that way, Agile mindset will grow organically and very soon you would be ready to share your own Agile success story and inspire the others.

Agile HR

Agile HR or if you want Talent Management as it is called nowadays turn the whole company around. It’s employees centric, delivering value to the whole organization. At a glance, not much had changed. We still need to hire people, take care of people growth, do some evaluations. Just the way we work changed significantly. So let’s go one by one to see the shift.

Hiring

Hiring process focuses not that much on skills, because skills could be learned, and will change depending on the business value priorities, and the team needs, but a person who is a good match to the company culture and the team. In an Agile organization people who can learn fast, are the starts. They can go to any cross-functional team and deliver value. We look for someone who has not a fixed mindset, is ready to change. Having said so, people are often not hired by HR and managers but the teams and the HR are only consulting and coaching teams in that process. The world of the fixed positions is over. All the recruiting agencies need to adapt as well. When we’ve been hiring, we involve team members and give them a strong voice in the process. We stopped looking for C++, Java, or C# experts, we were looking for passionate people who have energy, passionate about anything they did. We want to hear stories about what they love to do. Even if it was just a tiny thing they did over the evenings. We were transparent on how the work is going to look like, stressing the downsides, so they have clear expectations. Transparency is the key, so one of the great ideas is to invite candidates to join a team for a day. It’s like going to the date, getting to know each other better, get a sense on both sides how is it going to be.

One example of a very different interview is to ask the candidate to use a creative set of Lego bricks and visualize how it’s going to be once they joined the organization and have a conversation about the model. It’s something you rarely see in the interviews but it shows a lot about the candidates.

Evaluations

Evaluations and performance reviews changed significantly in Agile space. It’s less about reviewing, performance, and evaluation, more about development and vision of the future and growth. As the Agile organization operates internally in very short cycles, where through radical transparency and instant feedback through retrospectives the organization gets to inspect and adapt and solve any issues right away, we don’t really need classical KPIs as they are not supporting the adaptivity and flexibility Agile organizations need and missing a team aspect as well. As a first step, you can start with setting team goals, instead of individual ones. It will help. However, eventually, you need to redesign the whole concept from the scratch. The key focus is on coaching conversations, transparency, and candid feedback from your peers.

One example of a radical change you can use is the team-oriented feedback. You give each person on a team or organization (yes, it scales) a certain amount of money to give away. Let say $100, and ask them to distribute it to the colleagues. The only rule is you can’t keep it. If you think about it, the message you got by receiving $0 it’s much stronger feedback then anything your manager can ever say about your performance. Indeed, we need a lot of coaching to help people understand and handle what’s going on, but in general, that’s a good thing. If you scale this to the whole organization it’s even more fun, as the managers get such instant feedback as well as the employees.

Talent management

As I mentioned at the beginning of this article we are speaking more about talent development then HR. What motivates people? How do we grow talents? How do we support them on their journey? How can we help them to be successful? The answer is coaching, support them to create their own development goals, grow their interest, empower them, raise their awareness about themselves. Not surprising, but how many HR are taking such a support role and how many of the companies take it as process and governance role.

Example of such coaching conversation for the people growth could be using a few categories which are strategic for the organization right now to frame the conversation. Firstly, you need to make people aware of how the coaching scale works, that it’s very different from evaluation, it doesn’t have to grow quarter to quarter and that there is always a better way of doing things, and that this tool shall help them to identify their potential and find ways how they can grow to support the organization. As a next step, you let people rate themselves on a relative scale 1..10, where 1 = not good at this area, and 10 = I’m great at this. They need to be able to compare themselves with the other people around in the organization, explain how it would be, when you are 2 points above the level you are currently, what would be different once you get there, what would it mean to the organization, what is currently in their way, etc. All of those are good coaching questions. No magic. It just works like a magic 🙂

Five books every Agile leader should read before they start Agile transformation

To continue my with my book recommendations (check Five books every ScrumMaster should read and Five books every Product Owner should read), I have several books here, I would recommend every Agile Leader and manager in Agile Organization to read before they start Agile transformation. It’s a mix which will help you to understand Agile Leadership, Agile Organization, it’s structure, design, and culture and allow you to adapt to the different leadership style. Enjoy reading 🙂

Niels Pflaeging – Organize for Complexity: How to Get Life Back Into Work to Build the High-Performance Organization is about complexity and work – and about how to deal productively with both. A condensed introduction to the theory and practice of organizational high performance. A manifesto for contemporary leadership and profound transformation in organizations of all kinds. It is “practically theoretic”, featuring cutting-edge insight. It proposes new language and thinking for a new way of work and organizations.
Frederic Laloux – Reinventing Organizations is a must. The way we manage organizations seems increasingly out of date. Survey after survey shows that a majority of employees feel disengaged from their companies. The epidemic of organizational disillusionment goes way beyond Corporate America-teachers, doctors, and nurses are leaving their professions in record numbers because the way we run schools and hospitals kills their vocation. Government agencies and nonprofits have a noble purpose, but working for these entities often feels soulless and lifeless just the same. All these organizations suffer from power games played at the top and powerlessness at lower levels, from infighting and bureaucracy, from endless meetings and a seemingly never-ending succession of change and cost-cutting programs.
Large-Scale Scrum: More with LeSS is looking at the organizational design from a different perspective. Rather than asking, “How can we do agile at scale in our big complex organization?” a different and deeper question is, “How can we have the same simple structure that Scrum offers for the organization, and be agile at scale rather than do agile?” This profound insight is at the heart of LeSS. In Large-Scale Scrum: More with LeSS, Craig Larman and Bas Vodde have distilled over a decade of experience in large-scale LeSS adoptions towards a simpler organization that delivers more flexibility with less complexity, more value with less waste, and more purpose with less prescription.
The Responsibility Process: Unlocking Your Natural Ability to Live and Lead with Power is about FREEDOM, POWER, and CHOICE. Leadership is innate. The Responsibility Process proves it. The Responsibility Process is a natural mental pattern that helps you process thoughts about taking or avoiding responsibility. How you navigate it determines whether you are leading toward meaningful results or just marking time. This book gives you precision tools, practices, and leadership truths to navigate The Responsibility Process and lead yourself and others to freedom, power, and choice.
Leadership and Self Deceptions shows how most personal and organizational problems are the result of a little-known problem called self-deception. Through an entertaining and highly instructive story, Leadership and Self-Deception shows what self-deception is, how people get trapped in it, how it undermines personal achievement and organizational performance, and- most importantly the surprising way to solve it.

BONUS:

Finally, there is a bonus book which I wrote a few years after this blogpost 🙂 The Agile Leader: Leveraging the Power of Influence Book published in December 2020 will help you to unleash your agile leadership potential and guide your entire organization toward agility. It’s a great overview of concepts for managers, directors, executives, and entrepreneurs―anyone, regardless of position, who’s ready to take ownership, challenge the status quo, and become a true agile leader. See more at https://greatagileleader.com.

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 1.0 Those 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.

The 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 2.0 Organizations 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 style The 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?

– 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: