How to make an Agile Transformation work for Business, not for Coaches only?
Agile Transformation may turn out into a complete waste of money without any improvement in the company’s capability to achieve its strategic business goals. If this is something you can not quite agree with, then you might not find this article valuable. Neither will it make any difference to an organization that goes for an Agile Transformation solely to keep Agile Coaches busy.
We will assume that the reader considers that Agile is a mindset, a culture. In this case, it should be clear that the Agile Transformation is impossible without a respective cultural shift; otherwise, this transformation is anything but Agile.
In this article, we will focus on the organizations, who understand the importance of doing work by self-organizing units (e.g. small teams or big teams of teams) instead of using the traditional command-and-control approach.
We will use a well-known Iceberg Model of Systems Thinking to explain the system of the Agile Transformation.
In this model, the Performance shows how good the self-organizing units are at achieving Strategic Business Goals. Ultimately, higher achievements in that should become the rationale behind decisions to go for the Agile Transformation.
2. Processes, Knowledge, and Skills
Performance depends on how well Processes work (including working agreements, communications, coordination, relationships, etc…) and how good are Knowledge / Skills inside the self-organizing units.
Processes in self-organizing units are expected to be a result of their own decisions. These decisions are made within their internal Cultural environment. Process efficiency and effectiveness depend on this environment.
Knowledge and Skills can improve in different directions, and these directions depend on Culture. For instance, in the Cultural environment, which gives credit only to narrow specialization, employees are more likely to grow solely in one single competence. Even if they discover that the multi-competence could give them enough flexibility, remove queues from their processes, and always focus on the work bringing the highest value, in this cultural environment, they will proceed to grow in their narrow specialties.
Culture eats strategy for breakfast
Culture can change only when there’s a respective Motivation. Important to note, that Motivation is always in respect to something and this “something” is crucial to determine — not only the level of motivation. Sometimes, we may ask “is this person motivated enough?” and receive an honest answer “yes”. However, if we asked “Is the person motivated enough to become a good team player and put team goals over own interests?”, the answer could be different.
As we discussed so far, Processes, Knowledge and Skills, Culture, and Motivation are the Key Factors impacting Performance. These factors, their interaction, impact on Performance, and their dependency on other elements of the bigger system outside the self-organizing units, described at Orees.org here as OREES Factors based on the example of Scrum-based organizations.
Structure eats Culture for Lunch
Here, by Structure, we mean the whole organizational system surrounding the self-organizing units, all roles, responsibilities, authority distribution model, processes, standards, policies, career paths, work titles, etc.
The connection between Structure and Culture described above represents the rule:
For those who do not have enough influence on Structure, their Culture follows Structure.
In points #3, #4, and #5 we clarified this relation, which can be outlined as:
Culture follows Structure only in case this Structure creates respective Motivation which drives employees to change their Culture.
Imagine a People Manager who does Individual Performance Evaluation solely to satisfy the formal process, though this is done in a way that prevents any influence on the motivation of the employee. In this case, the element of Structure “Individual Performance Evaluation” does not impact Culture anyhow.
Though, this case is very rare since even the idea that the manager conducts this assessment has some meaning to some people. Most often, this process has a severe impact on Culture through a respective Motivation. It may be due to one-to-ones with the manager based on this assessment results. Alternatively, it may happen that salary, or bonuses, or other aspects that matter to the employee depend on the results of this assessment.
Imagine another People Manager who does not evaluate the performance of individuals on the self-organizing team. Instead, this manager just lets all team members give feedback to each other with respect to how close their behavior is to the behavior of a great team player, who is fully focused on achieving common goals.
In this setup, the performance evaluation result does not stimulate team members to focus on how to represent their individual achievements better to someone outside the team, but it stimulates people to become better team players striving for the common goal. In this case, Structure impacts Culture, and this impact is completely different compared to the previous example.
More explanation of this and other similar examples, together with one of the possible examples of the whole Structure focused on creating an Agile culture in companies adopting Scrum is described at orees.org.
Up to this point, we covered all the main aspects which are usually touched in Agile Frameworks, when their adoption is taken as a basis for the Agile Transformation.
While considering those frameworks, the critical question should be answered.
It shouldn’t go like “does it work well at Spo..fy?”. If you like their culture and want just to copy-paste their Structure, you have to make a complete clone of the whole organization, including people and location. Moreover, you would have to develop the same product in the same market. In case there is no chance of creating this company’s complete clone, then you might find a different culture there as a result.
Neither should the question be like “at how many companies does it work well according to some nobody-knows-how-collected statistics?” All companies are unique, and should it be declared that one framework works well in more companies than others, that means neither that this information is trustful nor that it will work better for your company.
“Are we sure that to maximize our company’s capability to achieve its strategic business goals, we need to optimize our organization in a way that this framework is designed for?” — this is how this critical question should be formed. Considering, that Optimizing Goals reflect the intended state of some key organizational characteristics, the question above can be rephrased as follows:
Are we sure about the Optimizing Goals of our company, and are they consistent with the Optimizing Goals of this Agile Framework?
Each Agile framework is tailored to optimize the organization in some specific way, which can be represented by its Optimizing Goals. These goals should be identified and justified based on the whole concept of the framework. The article “Scrum: Optimizing Goals” will shed more light on the Optimizing Goals on the example of the ones of Scrum.
It is essential to note, that the Structure that we consider in our system model is not limited to the structure required according to the Agile framework (such as having long-living cross-functional teams in Scrum). Structure that we consider in our system model also covers all the rest of the elements in the broader organizational context, which anyhow interact with the structure prescribed by the framework. Usually, it includes the performance evaluation process, line managers’ responsibilities, org chart, career paths, salary management, rewards distribution, etc. Those elements of Structure that usually have the most severe impact are considered in detail as the Ecosystem here.
Let’s proceed to learn the system based on the Iceberg model discovering what impacts Culture.
6. Culture of Top Management
Organizational Structure is a product of Top Management’s activity. The way how exactly this activity changes Structure depends on the Culture and mental models of Top Management.
Structure follows Culture of those who manage Structure.
Taking into account all the said above, this leads to the following:
Culture of the whole organization follows Culture of those who manage Structure.
7. Experience of Top Management
Culture and mental models of Top Management can change when they gain a new experience.
Top Management can gain new experience themselves. Sometimes, this is a CEO, Head HR, CTO, or another C-level manager who “got infected” with Agile Culture at some Agile conference, training, or simply with one of encouraging TedTalks. Though, in many cases, this new experience becomes only a trigger to learn about this culture.
8. Organizational Coaching and Results of Experiments
Sometimes, a new experience of Top Management comes from experiments that Top Management decides to do themselves with respect to structural changes — painful and expensive experiments in many cases turning out into a complete fiasco.
Another way is to learn from already existing experiments worldwide, learn systems thinking, lean thinking, Agile mindset, etc. Then, it makes sense to consider involving respective experts to get Organizational Coaching.
Organizational Coaching should be done by those, who possess both the genuine Agile culture and relevant experience in structural changes fostering a respective cultural shift.
If the company adopts Scrum, then ideally, these should be Scrum Masters with relevant expertise who work within product groups of this company and go through all the pain caused by existing Structure. If such Scrum Masters are absent in the organization, it will be worth hiring a few.
- The cultural shift is impossible without the full engagement of Top Management to drive necessary changes in the organizational structure.
- Top Management should start with a clear understanding of what the optimizing goals are, and which achievement will create the necessary capability of the company to achieve its strategic business goals.
- Top Management should identify an Agile framework(s) which Optimizing Goals are consistent with the Optimizing Goals of the company.
- Top Management has to have an Agile culture and expertise in respective structural changes. Here the structure that might need changes is usually wider than just the structure required according to the chosen Agile framework.
- When the latter is not the case, Top Management should involve those who have this culture and expertise in respective structural changes. If the company goes for Scrum, ideally, these experts should be hands-on, acting Scrum Masters with relevant expertise.
This Article is prepared based on the materials available at orees.org.