Management in the Agile Enterprise

The traditional organizational structure is a command-and-control top-down bureaucracy where instructions flow down from the top. This no longer works in today’s dynamic and uncertain digital economy. To take one example, the biggest cost of delays to projects is getting decisions from higher up the hierarchy (Decision Latency, Standish Group, 2018). We know that small autonomous self-organizing teams accountable for specific outcomes is a better model but how does management work in such a model?

We know that in the daily operation of such a team there shouldn’t be someone who is responsible for managing the individuals. Or to put it explicitly, there should not be a development manager on the scrum team, nor should the Scrum Master be line-manager for the team, nor the product owner. In order to facilitate collaboration and transparency everyone on the scrum team should be seen as equals and can feel free to speak openly and freely. Having one of the team be the manager clearly breaks that and actually decreases transparency within the team.

Before we move on to how line-management should work, let’s briefly finish discussing accountability and control within the team itself. Autonomous teams means the team has the power to make decisions about what to do and how to do it within broad parameters of control. Decisions about what, how and process are collaborative but each role has ultimate responsibility.

The Product Owner is responsible for the ‘what’ – what features, defects, technical debt and architectural runway are delivered in any given period, what the product vision and roadmap looks like, what priority to tackle work to provide the highest business value across stakeholders.

The Development Team collectively is responsible for the ‘how’ – how a particular feature or story is to be designed and delivered, how quality is managed, how to actually perform the development (choice of programming language, version control tool and so on).

The Scrum Master is responsible for the ‘process’. The process by which decisions are made, the process by which the team collaborates, the process by which the team improves output over time and so on.

Community Leadership

We’ve covered how the autonomous team operates and is accountable but what about those broad parameters of control – who sets those? For a particular function, such as QA, there should be a community of practice that all QA resources belong to. The community sets standards, defines tools and processes for how QA should be conducted across the company. It also provides coaching and training to help the professional development of the practice members. Ideally this community would be self-organising, perhaps with a nominated leader responsible for evolving and maintaining the community such as driving engagement from the membership. An alternative approach for organisations in transition is to have a functional manager take on the community leadership role – for example the QA manager would take on the QA community of practice leader.

As for overall business direction, there’s clearly still a need for an executive leadership team who are responsible for defining the vision and strategy for the company. I know there are some companies such as Valve that have supposedly done away with this layer but it’s an extreme approach to the problem.

We need new terminology

So that leaves us with the question of who owns the part of line-management associated with pay and performance reviews, personal development and managing culture or personality clashes. And here’s where I think we need to change the terminology. Line-management implies a reporting line from the individual contributor upwards – we even sometimes call them ‘direct reports’. But we’re not doing any reporting – all reporting of progress is done within the autonomous team structures. For now I’m going to call these managers “People Managers” (share your suggestions below!). As People Managers are purely focussed on developing individuals and not burdened with daily oversight of work they can manage many individuals – say 10-15.

If each People Manager is responsible for the development of 10-15 individuals then you can see how a typical organisational structure could become a lot flatter. A flatter hierarchy helps to remove some of the bureaucracy and helps ensure that openness, transparency and collaboration becomes a norm of working in the company rather than something that has to be consciously done.

However it’s not as simple as just removing management and flattening the hierarchy. The risks are that you end up with a hidden informal power structure with few checks and balances. Certain individuals can end up wielding exceptional power over those around them. Therefore there still needs to be rules and processes in place, along with an appropriate amount of business leadership. In other words, you need to find the minimum viable hierarchy but avoid taking it to the extreme.

Related Reading:

-       https://www.mckinsey.com/business-functions/organization/our-insights/the-agile-manager

-       https://www.theguardian.com/commentisfree/2018/jul/30/no-bosses-managers-flat-hierachy-workplace-tech-hollywood

-       https://www.scaledagileframework.com/the-evolving-role-of-managers/

-       https://www.mckinsey.com/business-functions/organization/our-insights/the-five-trademarks-of-agile-organizations