Scale organisational collaboration (not the process) to deliver Customer Value

A latest survey from Project Management Institute about the state of project management has reported that agile ways of working and practices have become mainstream and about 71% of the organisations are using agile in some capacity.[1] Many organisations are trying to develop an agile capability and embed that into existing governance and capability mix. Often leadership sees this as an opportunity of implementing agile practices within the existing project delivery capabilities just like many other practices that surfaced over the years. What is often lacking is an understanding of the values and principles behind agile that can deliver a sustainable agile capability to the organisation.

Organisations that have successfully embraced agility have moved away from the traditional hierarchical organisational structures and have learned to increasingly operate as a network of collaborative teams that are autonomous and cross-functional. This network comprises of much formal and informal interaction among managers, teams and customers with decentralised control and decision making.[2]

This blog focuses on the culture & collaboration side of agile organisation and how organisation can use culture and collaboration to scale its capability to be more responsive to customer needs.

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Many organisations that are new to agile, often start with Scrum which is one of the widely used agile methods. Small cross-functional teams are the central piece of Scrum. A cross functional team of engineers under the guidance of a knowledgeable business product owner continuously deliver the product features based on the priority set by the business. Depending upon the nature of product development a time interval can be chosen by the team (typically between 1-4 weeks) to regularly plan, develop, check and adapt the product per the needs of the customers. The key in this structure is to include all necessary skillsets into the team so that team can maintain a sustainable delivery cadence without much dependencies on other teams. This works well with small teams working on focused problems. A typical journey for these teams looks like Figure 1, from component teams to feature teams and then becoming continuous innovation teams.

Picture1

Figure 1: how an agile organisation might move its teams from component teams to feature teams and then to truly innovative continuously learning teams by giving them cross functional expertise and autonomy.

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However, this requires a major rethink on part of the organisational leadership. Most large organisations are today structured around the hierarchies of command and control espoused by at least a century of management education based upon scientific management theory.[3] The majority of managers today and their organisational HR colleagues are comfortable with hierarchies and functional structures as a source of stability in a large organisation.

As agile has become mainstream with larger organisations moving to embrace agile and developing an agile capability, their managers and leadership need to repurpose their organisational structures and ensuing practices to enable better collaboration and team based outcome.

People responsible for implementing these practices grapple with the questions around the composition of cross-functional agile teams and how to scale these processes across the organisation to become agile. Over the years the software development community has come up with several possible solutions that promise to achieve this; SAFe[4], LeSS[5], NEXUS[6] to name a few of the methods that come to mind. However due to the scale of technical integration and size of large businesses, it is often beyond the mandate of these managers to establish teams that are fully cross-functional (beyond IT) and independent.

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The journey to collaborative agility will be different for every organisation based on the mix of skills they have and their industry and customers. Every organisation’s market sector has an influence on its operations and puts certain constraints on them.

For example:

  • A leading electricity distribution company within the utility sector is regulated by an industry regulator and follows a 5-year capital expenditure cycle. Due to monopolistic setup of this organisation, its ability to influence its price and costs are monitored by regulator as well as any move to move into new adjacent markets.
  • A leading company in the medical equipment manufacturing sector enjoys robust market position, long product life-cycles and strict industry compliance regime to follow but otherwise is free to enter or exit markets.
  • A leading dot com is a leader in its specific market but faces some tough competition from an aggressive number 2 & 3 and operates in a fast-growing market with low barrier to entry by new players. Shorter product life-cycles, constantly shifting technology landscape and shift of consumers to digital provides challenges but also exciting opportunities.

For each of these companies developing new products (or new capabilities) and developing a responsive delivery capability may serve different objectives. Agile enables organisations to cope with continuous change. It allows them to operate in a world that is increasingly volatile, uncertain, complex and ambiguous. Understanding the factors that are influencing the volatility, uncertainty and complexity in their specific environment is a first step to understand how agility can be introduced into the operating practices. The business environment and the organisation’s position within its specific area will play an important role in defining a compelling vision for the future and designing the strategy to pursue and achieve this vision. Agility, defined as a core capability to continuously learn and stay relevant to customer needs is an important enabler for the business strategy.

Taken in this context, agile feature teams are a step to achieve “focus, clarity and predictability” in the delivery phase through business & engineering collaboration, which is harder to achieve with non-agile teams (often structured around component teams in Silos). New product development must be a cross-functional endeavour because of so many different pieces of the puzzles that must be solved for a successful outcome. Due to Scrum’s emphasis on “small team size”, people wrongly assumes that scrum is only for the technical product delivery. The collaborative approach espoused in this method can be used to achieve successful customer outcomes by bringing all relevant people together on this effort. A valuable outcome needs all the people who are required to deliver it across the organisation.

In this context the idea of a Value Pod might make sense which is a mini-organisational setup to satisfy the needs of a specific customer group. This value-pod has all the resources available (people, skills, tools, technology etc.) as well as authority to set strategy, operational control and financial autonomy. To some, this may sound like a business unit structure (common in multi-national corporations). A value-pod is like a decentralised business unit with full autonomy to achieve its objectives, however the key difference would be collaborative management and delivery of customer value by everyone involved. This value pod comprises of business management and delivery skills so that different planning horizons are satisfied and value pod can capture that value in market. Scrum, Spotify, Kanban and many other systems of work can be applied to achieve this goal but I use the “Value” analogy to make it clear that collaboration must be a cross-organisational activity and not just a cool idea within IT only.

Picture2

Figure 2: A value pod includes business and technology teams working as a single unit to delivery successful customer outcomes. Value pod has all necessary skillset to be effective in its pursuit of market success.

The cultural attributes of this kind of agile organisation are discussed by Dr. Steve Denning in detail in his book as well as in his article.[7,8]

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It is important to understand that any agile method is one of the many ways to start the collaborative journey. Agile teams are a step towards collaboration, decentralised control and team based decision making which (if structured properly) should result in better customer focus, responsiveness, predictability and learning as an outcome. Organisations need to continuously evolve their operating rhythms, practices and structures to support this collaboration. Instead of scaling the process, organisations will be better off in scaling the intra-team collaboration based on agility principles.

It is also not a debate about waterfall, agile or any specific method (it never was). It is about achieving the business goals through better ways of collaboration and delivering value through continuous focus on customers and learning about their needs. Those who will organise around new collaborative ways of working will benefit from faster speed of learning and identifying opportunities to deliver customer value faster and reap the rewards attached to customer satisfaction.

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References:

  1. Pulse of the Profession 2017, 9th Global Project Management Survey, PMI (2017)
  2. ING’s agile transformation; an interview with Peter Jacobs, CIO of ING Netherlands, McKinsey Quarterly, Jan 2017

  3. Freedom from Command & Control: A better way to make Work work, By John Seddon (2006)

  4. http://www.scaledagileframework.com/what-is-safe/
  5. https://less.works/
  6. https://www.scrum.org/resources/nexus-guide
  7. The Leader’s guide to Radical Management, by Steve Denning

  8. https://www.forbes.com/sites/stevedenning/2016/09/08/explaining-agile/#4091b356301b

 

 

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