Hierarchy

I recently posted a quote from a conference saying that “Removing hierarchy and cross-team dependencies made space for strong collaborative teams.” Interestingly, I got many comments and questions about it. So let’s talk about hierarchy and why we don’t need it in Agile space.

But before we dive deeper… What is the hierarchy? – using dictionary definition: “Noun – a system in which members of an organization or society are ranked according to relative status or authority.”

Traditional Organizations Need Hierarchy

Organizations where employees are ‘ranked according to relative status or authority’ is what we inherited from the traditional organizational paradigm which is built on top of the belief that hierarchy is the key – every organization needs to have an org chart, we have to have a clear line of reporting and decision making. And I’m not saying it’s wrong, you can keep all the traditional practices like a career path, positions, performance reviews, KPIs, etc. however such organizational design is not what I’m interested in and has nothing to do with ‘being agile’. Traditional organizations might be still well functioning, applying some frameworks and ‘do agile’, but the mindset at the organizational level is just not there yet.

Agile Organizations Are Flat

What I’m interested in is applying an agile mindset at the organizational level. Help not only individuals to ‘be agile’, but the organization as well. Agile is fundamentally changing the way organizations operate. Agile organizations are built on a new paradigm. They have a team as the key building block and are forming collaborative, creative, and adaptive networks from them. In a team, we don’t have status, and we have no ranking either. All team members are peers, with no positional hierarchy and power. Indeed, you can gain respect from the other team members in a team, but you can also lose it if you don’t bring value to the people around you anymore. It’s flexible and dynamic. All you need is radical transparency, peer feedback, and honest culture with implicit trust. You might say it’s a lot, and I’m far from saying it’s easy. However, once you experience it, you never want back to the traditional world.

Who decides on the process? Teams. In a flat organization, they are not only self-organized, but self-managed (so they are responsible for the processes), self-designing (so they are designing teams), and self-governing (so they are setting overall direction). To get more insights on those terms, see how LeSS defines them. All over, you don’t need much more than what I already mentioned – transparency, feedback, and trust. If that’s too abstract, you can get inspired by Sociocracy 3.0. It will give you more ideas on how to get there.

Who set’s the goals and objectives? No one. They are co-created by the teams, reviewed through radical transparency, and inspected and adapted via frequent feedback to flexibly address the business challenges. At the end of the day, fixed goals are useless in the VUCA world. VUCA stands for volatility, uncertainty, complexity, and ambiguity. In other words, we speak about the world which is not predictable anymore. The cascading goals neither unify nor motivate. The more decentralized and autonomous the organizations are, the higher need is there for a strong evolutionary purpose. Co-created and owned by all. Transparent. You can get inspired by Frederic Laloux’s work.

What about budgets? Who says we need to have a budget in the first place. Again, you don’t need much more than what I already mentioned – transparency, feedback, and trust. Make all the finances transparent, and use instant peer feedback to review it. If that is too radical, you can get inspired by Beyond Budgeting.

All over, I guess you got the pattern. In an agile flat organization, we don’t need most of the traditional practices. All we need is radical transparency, peer feedback, and honest culture with implicit trust. No one is saying that you have to turn your organization into a flat structure and an agile mindset. But if you want to do that, be ready to redesign the way you work entirely.

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.

Difference between manager and leader

Leader and manager, what is the difference? Is there any? People are often mixing these terms up so let’s make it more clear.

Leader- LeaderFirstly, managers shall be leaders. That’s where the confusion is most likely coming from. But leaders are not just managers, leader is not a position, anyone can be a leader. In an Agile organization where hierarchy is becoming less important, we take more focus on leadership than management. There is no authority given to a leader. They gain it by their actions and behaviors and by their service to the people around them. Leaders could be anywhere in your organization and their power grows by respect of others. Managers, on the other hand, are often associated with decision making, and certain power which must be given to them.

Leaders are key to any Agile organization. The more leadership is in the organization, the more likely the mindset will change and the Agile transformation will become successful.

“Leaders need to change first. The organization will follow. “

Don’t wait for anyone, you are the leader you can change today. Agile is not about practices, rules, or processes. Agile is about the different way of thinking, different way of approaching things, different mindset. And it’s all in your hands. You are the leader.

Emerging Trends in Agile

The world is changing in cycles, fashion goes in cycles, and the same is true for Agile. What was trendy yesterday, is not today and it can change surprisingly fast 🙂 So let’s have a look what are the new trends in Agile and what the Agile community is talking about:

Agile Leadership and Agile Organization

Agile OrganisationAgile is not just a set of practices how to write a good software, but it’s more and more used in every part of the organization. The traditional leadership (leader-follower model) is no longer acceptable in Agile environments. In the previous years, almost everybody focused on teams and how to adopt Agile, Scrum, and Kanban to the teams. But if we want to be successful at the organizational level, this is not enough. We need to push boundaries and help the whole organization to change. Hand in hand with that, we need to grow Agile leaders and support Agile leadership which is the critical key to the organizational success with Agile.

Agile out of IT

As it was already mentioned, for real success, it’s important to change the whole organization into Agile. The common practice is to change IT department and leave it as isolated island inside the traditional organization. But this is just the beginning. The company has to follow the same culture and the same style of the working, so you hear more and more about Agile in HR and talent management, Agile finances, Agile marketing etc.

Business Agility

Finally, there is a term of Business Agility which brings back the real value of Agile. Agile was never meant to be development process of your IT. It was supposed to be business value driven. It should bring the startup mindset back to the organizations, and look at the delivery from a business perspective.  Prioritize, deliver value in short cycles, get feedback, measure impact. This is the real Agile mindset.

If you are in Agile or do you plan to try and implement it focus on these topics because without it Agile become only an empty skeleton of practices and processes. Agile is organizational change, it changes the mindset, culture, leadership, and business focus. If you take it as such change, you are going to be successful with Agile.

Undone Organization

Agile and Scrum transformation is not any easy and it takes time. For a big organization, such time can easily be counted in years. During those years you would be dealing with so-called undone organization. Scrum itself only knows three roles – ScrumMaster, Product Owner, and Development Team. That’s all we need to deliver value to the customer. The other roles are ultimately not needed.

However, at the beginning of our journey, the undone organization might be bigger than the Scrum part of our organization. As our Definition of Done is extending, the teams are getting more and more cross-functional, we are able to embrace those people and make them part of the team. The more the team extends its cross-functionality, the closer we get to the production quality and real-time feedback.

For example Architect and UX people are often at the beginning of the Scrum journey outside of the team but as the team is getting better and learn, teams are able to take it over and make it part of the Definition of Done and separate Architect and UX roles disappear and people move into teams. At first, it sounds unrealistic but in some time this is exactly what needs to happen in order to optimize for fast value delivery and feedback.

Agile Leader Competence Map

The more the Agile Leadership is popular, people are asking for more description. Who is the Agile Leader, what makes him different from a traditional manager, and which competences and skills they have to have. So I created this Agile Leader Wheel so you can map the competences and skills.

Great Agile Leaders have four core competences in which they can create vision, enhance motivation, get feedback, and implement change. Vision is the driving engine. It’s not necessarily related to the product and business but the organization itself. The second segment is motivation. Agile Leaders understand the nature of motivation, are familiar with the power of intrinsic motivation of autonomy and purpose. The third one from the top section of Agile Leader Wheel is feedback. For Agile Organizations feedback is crucial, it makes the team and product feedback part of their DNA, it becomes integral part of their culture. The same for Agile Leaders, the regular feedback from the system is the key to their success. The last piece is ability to implement change. For Agile Leaders the change is happening at three levels. Firstly there is change of myself, my own beliefs, reactions, the way I work. Secondly there is the ability to influence others. Make them part of my team, get supports who will help me to lead the change. Finally the third element of change is change at the system level, the whole organization level.

Agile Leader Wheel

In addition to the mentioned competences, Agile leaders will need to balance the time when they need to take a decision and when it’s better to delegate and empower others to take decision and responsibility for that. Finally on the right side Agile Leaders are facilitators and coaches. We are not speaking here about one-one coaching. Great Agile Leaders use coaching as a spice to address the complexity at the system level, and coach organization as whole. Great Agile Leaders are not born this way but constantly develop those competences and skills. This concept is part of my Agile Leadership program where I help leaders to understand complexity of nowadays organizations and be successful in their roles. Looking forward to see you at some of my Agile Leadership workshops.

Traditional metrics are dead, let’s kill KPIs

Most of the people, when you ask them, admit that KPIs are not any useful at their organizations. They don’t motivate, they don’t change people’s behavior to any better way. In the best case KPIs are usually a formal metric, in the worst case a way how to punish people. In modern organizations, which are built on top of collaboration and teams, the need for individual metrics disappeared. So what can you do instead?

If you have a bit of courage, you may try this: ask all team members to distribute for example 100$. They can give it to any team member, but can’t keep it for themselves. In a very short time, you get a very honest feedback. If you ask people to give Kudos or appreciations together with that, it’s awesome. Problem of bonus distribution solved. There are companies which distribute the bonuses not only within one team, but across the whole organization. To the receptionist, CEO, sales, developer. Your choice. We make it very transparent, so the system will correct any weird behavior as exchanging bonus money within two people. In general this is more theoretical question. I haven’t seen it happen but it comes out anytime we talk about it with managers. I guess it indicates lack of trust.

Another way how to do it when your organization is more Agile is to give every month people some money to their bonus account, you can keep them of give some to the others. Each month the random person from your company rolls a dice and if there is a six, the money is yours and we start to build another jackpot. When it’s any other number, they just continue in moving money as appreciation. As no one knows when the money is going to be paid, they don’t game it.

Finally, I have to admit that I don’t believe in any money bonuses. They are not going to help with real motivation and the risk of side effect is higher than possible outcome. So I would kill not only individual KPIs but bonuses as well. You can achieve better motivation by giving people autonomy, responsibility and clear purpose. And you can help them grow with coaching. It takes more time and energy then do KPIs and bonuses, but it brings higher results.

Agile Culture

Culture is intangible. It’s hard to touch. Hard to define, hard to measure. However, it is the critical piece for the organizational success. We may debate if culture follows an organizational structure or vice versa, but I don’t think it is important. Culture reflects our values and philosophy. The way we are. Being Agile is about changing mindset. If enough people change their mindset, the culture changes and they become Agile Organization. Simple if you say it this way, but hard to do.

I’ve been looking for a good definition of culture for years. I surprisingly find it at CAL (Certified Agile Leadership) training which I attend from Michael Sahota in California. I very much like his way of describing culture, and I used it as an inspiration for my drawing.

Agile CultureThe culture consists of two parts. The mindset and structure. I’ve always seen the mindset as the most important part of culture, a driving force. Something which can change the structure part if done well. To my belief structure is always preventing us from change, from being successful. So shall we change the structure or mindset?  I would always go for the mindset. It’s harder, but it brings significantly better results. Create a clear goal. Purpose. Something which makes to you stand up every morning and put energy into it. Something you truly believe in and are willing to take ownership and responsibility for. Something which makes you collaborate with others, something which makes your day. When you succeed with the mindset, you are usually ready to change the structure. So I truly believe that structure follows mindset. Which is good, because as the first step you can start with changing yourself. 🙂

Entire System – The World Dimension – The #ScrumMasterWay Concept

The world dimension of #ScrumMasterWay concept represents three levels ScrumMasters shall operate. The third element is called Entire System. Though the time and energy ScrumMasters spend on each level differ based on the team or organizational culture and maturity level, they have to be present at every level to keep an eye on changes. As organizations are complex systems, you can stay here forever. There is always some change which needs your attention, there is always a better way how we can do things, there is always a better way of work.

Level 3: Entire System

At this level, ScrumMasters shall look at the organization as a system, from ten thousand feet distance. Searching for organizational improvements. They shall become servant leaders, helping others to become leaders, grow communities, and heal relationships. Bring the Agile values to the organizational level. Address the system in its whole complexity and make it a self-organized network of great teams. At this stage, you can see your organization as a living organism. This living organism has one goal of which no one has doubts. This system takes experiments and learns from failures. The safety, transparency, and trust are deep in the system DNA. The culture value collaboration and trust which gives us an opportunity to come up with more innovative and creative ideas then hierarchical traditional structures.

#ScrumMasterWay - Entire System

You might feel you are done, you made it. Please celebrate, it’s a huge achievement. And then let me remind you, there is no end of your journey. The goal is to achieve the right mindset of inspect and adapt every day. Being Agile is the star on the horizon, you can never touch it, but in short iterations, you can get closer. That’s what Agile is all about.

If you are struggling about how to create such Agile organization and how to work at this Entire System level of #ScrumMasterWay concept, join my Certified Agile Leadership class (CAL) which we now offer as the only ones in the Czech Republic and Slovakia.

Leadership – Myself Dimension – #ScrumMasterWay concept

Let’s continue with the last element of ‘Myself’ dimension. As we already said in the previous blog posts, each element of this dimension is represented by a dice which you can roll every day of Sprint and choose the aspect you are going to take. The fourth dice stands for leadership. If you want to transform the organization, your leadership style shall change first. In this element, we talk about being a servant leader, creating the culture, feedback, motivation, collaboration, and leader-leader style.

Servant Leader

ScrumMaster is a leadership role. One of the aims of ScrumMaster is to make others work better, they are servant leaders. They can heal relationships, create communities, listen to others, have empathy, and think beyond day-to-day tasks and short-term goals. Only when you become servant leader you can be the great ScrumMaster.

We Culture

Agile needs the right culture. It’s all about us, how we work as a team. Be collaborative, support each other, take over responsibility and ownership for the team. ScrumMasters shall be using their leadership skills to create such culture because without it Agile and Scrum can never be successful.

Feedback

Give and receive feedback is critical for every leader. It’s important prerequisite to inspect and adapt. ScrumMasters shall be actively searching for feedback and find creative ways to allow people to learn from it.

Motivation

Part of the motivation is coming from the environment and culture. ScrumMasters support intrinsic motivation factors as they are aligned with their goal to create a self-organized team. Motivate through an understanding of the purpose and clear goals, safe to fail learning environment, and open and transparent culture.

Collaboration

Collaboration is written in the Scrum DNA. Scrum is all about teams and collaboration. There is no individual work important in real Scrum, no individual goals. We do our best to achieve the goal – deliver value to the customer.

Leader-leader

The leader-leader model helps you to change the traditional leadership style of leader–follower where people are expected to follow orders into the leader-leader concept of servant leadership where leaders are here to help the other people to grow and become leaders themselves.