The missing link in agile management functions: governance to deliver the agile promise

With regard to the management or leadership functions in viable organization, I observe an agile governance challenge in each team at all levels of the organization. Customers are in the centre in the VUCA-world and in my previous article I argued that many teams are barely in conversation with customers. I ask myself how can that be reconciled with adequate responses to changes in the outside complex VUCA-world? Agile also means that the organization is optimized for innovation to be agile and I argued that organizations in general are not optimized for innovation. I introduced the management functions 3: management in here and now and management function 4: strategic planning and intelligence. These functions should be balanced and supervision is needed to apply the appropriate mix in a specific situation at a certain moment. Download article

I ask myself the following question: Who is governing the whole team picture in an agile mindset? The productowner? The scrummaster? Who monitors the purpose and the values of the team? Who supports and encourages the productowner to explore the future? Who monitors the balance between exploring the future and management in here and now? Beer’s viable model gives a helping hand to analyse the blind spots of management functions in so-called autonomous teams. In previous articles I described the agile leadership roles in squads and tribes. In this article I will elaborate on the management 5 function from Beer: purpose and values. Please note, a management function is not linked to certain people or to positions, for example the team should be a leaderful workplace, as also Robertson from Holocracy argued.

The management unit from Stafford Beer

For viable subsystems there is a so-called management unit, which ensures that each team (subsystem) can operate optimally and has the freedom to respond to the richness and variety of the complex environment. Beer's viable system fits in approaches like self-organization, self-management or the striving for maximum autonomy of teams. It provides the desperately needed reference to structure the organization for agility and resilience. 

Beer distinguishes three management functions:

• Management function 3: Management in the here and now;
• Management function 4: Long-term planning (strategy) and intelligence;
• Management function 5: Values and purpose.

Management function 5: Values & Purpose

The management 5 function or role in a subsystem (a team) provides a logical whole so that there can be a viable system. People in the management 5 position ensure that the values and purpose of the subsystem (team) are understood and embedded in work. The purpose is the aspirational reason for being, it is the big picture that is grounded in humanity and inspires a call to action. It allows teams and the organization to create value beyond financial metrics. Inspiring leaders "start with why". "People don't buy what you do, they buy why you do it," is Simon Sinek's mantra. A shared purpose should create strategic clarity. It allows teams to focus on what really matters - and in the process boost productivity, performance and loyalty.

Beer argues that the purpose should be formulated at all levels; an operational team should also describe its "reason of being". Often management presents the corporate purpose and the values. It is then crucial that every tribe and team give their own take on it and enter a dialogue with management. All team members are of course invited to reflect about the values and the purpose; they help translate the purpose into the team context and perhaps now and then they add something relevant for higher recursion levels. In other words, team members fulfill then the management 5 function. Be aware, that vertical alignment with higher recursion levels is a topic for the product owner and so for the management 4 function and it does not belong to the management 5 function. So, the management 5 function monitors continuously if the purpose is life and kicking and activities are aligned with the purpose of the team and the organization. When there is no longer any reason of being, people in the management 5 function will initiate a discussion with the team. Muddling through is no option and of course the higher recursion level takes good care of 'their' employees. In agreement with the higher recursion level new teams will start.

Values are gradually gaining recognition. Values such as trust, empowerment and collaboration are leading in my opinion. It is fascinating that the business agility community did not manage to come to a few key agile values, because they could not agree. So, the management 5 function monitors continuously if the values are embedded in the activities and in the process of work. 

In the management 5 function, people are also well aware that a team can only be viable by constantly learning. They embrace mistakes as learning and action means learning. You could say that the learning principle is placed next to the values. In my previous article I visualized this as follows:

At each planning and review session at least the management 5 function monitors if the learning principles are applied and if reference is made to the purpose. In other words, the purpose. values and learning principles from the management 5 function result in an agile structure of teams at all levels (subsystems). They are the guidelines for organizing.

With the management 5 function, the purpose, values and learning principles are constantly put in the spotlight. 

In the sensemaking process (Weick), management 5 also has the role to promote slow thinking, to question biases, to promote Kahneman's system 2. People in management 5 are alert to pain and pleasure signals; for opportunities and threats, for strengths and weaknesses. To become mindful aware is a crucial task for people in the management 5 function.

As an illustration, the Team captain at Riot Games has the following anchored responsibilities (italic words are my additions):

• Is accountable for having and leading with the right vision (purpose); vision can come from anyone);
• Create a healthy ecosystem where all team members are able to contribute and challenge openly and productively (values and learning principles). Does this by modelling desired behaviors; 
• Assess and recruit the best talent for the company and their team;
• Is ultimately accountable for all team outcomes (especially true for tribe and management teams).

Governance for balanced management functions 3 and 4

The management 5 function monitors that the management functions 3 and 4 are in balance. In other words, they prevent that people with management 3 functions lose sight of the outside world and they prevent that people with management 4 functions only take care of the outside world and neglect that work also should be done. The management 5 function is able to assess the balance in any situation at any time, since the scope might change in time. 

I observe that many people neglect the management 5 function, while you would expect it from them. For example, the CEO and tribeleads are mainly concerned with the management of "their" own subsystem in the here and now (function 3). Often you also see that people in the management 4 function (the product owner) try to own the management 5 function and before you know it, the manager of the past is back. Sometimes even to cover up that they neglect their primary task: collecting customer stories and prioritizing. In that case they will monitor themselves whether the balance between management function 3 and 4 is still appropriate. In itself it may be feasible, but prevent biased influences and organize it in such way that not only the product owner operates in the management 5 function;

Operating from a management 5 function is a role; just like the product owner and the agile coach. And from that role, people in the management 5 function ask questions, probe the subject matter and gives suggestions. In principle, people operating in a management 5 function operate from a hierarchy of competence and not of authority, it is the only way. If they operate from the management 3 function at the higher recursion level, they are not part of the team. Then there may be a hierarchy of authority, although they will have to be very cautious about it.

With people in the management 5 function, it is likely that the product owner will feel invited and encouraged to spend most of his/her time in exploring the outside world, dialogues with customers and assessing business propositions. As responsible for the backlog and the priorities of stories, he/she has also the role to protect the team for all kind of influences with regard of the priorities. He/she will feel less tempted to take on other leadership roles, to put on other leadership hats and in this way, you avoid interactions which are not helpful. It is also likely that team members have more space or feel to have more space in the management 3 function: management in the here and now. In this way autonomy and self-organization have more chance to develop and flourish.

Beer argues that people operating in the management function 3 at a higher recursion level, often also operate in the management 5 function of a team. In order to be able to fulfill its role in management 5, people should have insight into the team. That means for example, attending the planning and review meetings, often as a sort of observer or back bencher. Reports from the product owner to the tribelead are by no means sufficient to understand the dynamics in the team.

People from a higher recursion level fulfilling the management 5 function, make part of the team.

A person who feels him/her self as a fish in the water of management 5 is able to establish quickly an appropriate structure and an energizing working climate. In that case, team members will soon feel invited to assume the tasks and behavior of the management 5 function. He/she might also feel bored quickly, so you will see that these people will operate in different teams. He/she will probably underestimate their important role and sometimes experience it as a modest role; for example, that one and only pertinent monthly question is so crucial. And most likely only their physical presence will make other people flourish, do the right thing and ask the pertinent questions themselves.

Who operates in the management 5 function?

According to Beer management functions should not be tied to specific people or roles and yet I can't avoid it anymore. Often people operating in the management function 3 at a higher recursion level, also operate in the management 5 function of a team. At first glance it seems logical that the tribelead and the agile coach at tribe level fulfill or participate in the management function 5 in a team. With a view to the relevance of a learning organization, it would be appealing that a productowner of another team, operating in the management function 3 at the higher recursion level, would fulfil the role of the management 5 function in the team. In this way it is easier to avoid the pitfall of hierarchy. For a productowner it would be very insightful to carry out and experience the management 5 function; also, for the sake of his/her ‘own’ team.

In addition to supporting the team in the field of purpose and values, a person operating in the management 5 function should have insight into a proper balance of the management functions 3 and 4. He/she is aware and has insight business wise that each situation will ask its own balance.

What does this mean for the profile of such person? Just to name a few: analytical skills, wisdom, self-awareness and business sense are key elements. Probably an agile coach at tribe level will probably match with the profile asked. And yes, also the tribelead should fit, but you may ask yourself if a person with a management 5 function of the tribe, may also have a management 5 function in a team. For reasons of limited time this might not be feasible. You may also argue that the main role of a tribe lead is in the field of purpose, values and learning climate and and why not in the tribe teams. So, time should not be a question and then a tribelead might be an attractive person participating in the management 5 function of teams. However, when leadership from a hierarchy of authority at tribe level is needed, roles might be conflicting and then wisdom is required. A productowner known for his/her wisdom and business insight would fit the profile, eventually supported by the tribe agile coach. Looking at the difficulties to describe the profile, I assume that the management 5 function is quite delicate! For sure the role will strengthen the required competences.

Given its role in values and learning, the management 5 function will also play a role in the retrospectives. Often only the team members and the coach participate in retrospectives. However, for safety reasons, they prefer that others do not participate or observe. Perhaps it is then an option that the agile coach prepares the meeting or discusses it with the agile coach of the higher recursion level.

The management 5 function also picks up the remaining variety, which is not picked up by the other management functions.

Management 5 function at different recursion levels 

The viable subsystem at team or squad level

Regarding management function 5, the tribelead or a productowner from another team and the agile coach on tribe level play an important role.

The viable system at tribe level

At the tribe level, people from the management team (like the product owner from another tribe or agile coach of management) could fulfill the management 5 function in the tribe. Then they monitor if the management functions 3 and 4 are balanced at tribe level. A pitfall of the management 3 function from management is that they might interfere too much with the management 3 function of the tribe; then they attune the variety at tribe level instead of amplifying it. When they determine the tribe strategy then there is no viable tribe system, with all the consequences it entails. In quite some tribes there is a tribelead, who is not the tribe productowner. You might compare it with the tribe captain lead at Riot Games. In that case the tribe captain lead will and should operate most of his/her time in the management 5 function, where else? In that case the tribe captain lead and the person from the higher recursion level will collaborate. You might suggest to skip the person from the higher recursion level, but that would not be my choice. Be aware that the long-term strategy is in the management 4 function, with the tribe product owner as responsible. Naturally in collaboration with the tribe captain lead, so the captain lead operates also in the management 4 function. You may observe that the tribe captain lead may fraught with the other people with management functions. 

To be able to fulfill its management 5 function, the productowner and agile coach from management should be able to contribute and so they should participate at the tribe sessions, as back benchers and with an attitude of hierarchy of competence. Together with the agile coach they encourage team members to enter the management 5 function.

The viable subsystem at management level

An obvious management task is to provide a purpose or collective ambition. The CEO is the person par excellence who fulfills the management 5 function. He/she is the corporate captain lead and monitors if the management functions 3 and 4 are balanced and avoids to act in management function 3. The board of directors might fulfill the management 5 function but I doubt if they will observe the management meetings. And naturally, the CEO reflects in his/her behavior the values and learning principles; it should be authentic and genuine and it starts with them. Therefore, an agile coach at management level plays a crucial role to support the management functions. Unfortunately, in many management teams there is no agile coach… such a pity.

Naturally the CEO also is in the lead with regard to the long-term strategy, so with management function 4 (see for example Jeff Bezos). The CEO collaborates with the management product owner. 

Agile structure and governance

While writing this article and once again reading the bulky books of Stafford Beer and becoming more familiar with them, I became increasingly aware of the importance of the management 5 function. I see in so many organizations that people struggle with the product owner, a person who has constantly too many hats. If only because there must be someone who does and may do certain odd jobs. And the boss of the past can do anything, that's how we are programmed. The intention of Sutherland & Schwaber is that the product owner is mainly concerned with customer stories or user stories; with the outside world. So, with the management 4 function.

I struggled with the role of a higher level of recursion, with leadership and with accountability. By giving a few people from the higher recursion level a role in the management 5 function, the needed clarity in roles and functions is obtained, which paves the way for a dynamic and energetic work climate and a learning organization. Also, with this structure it is guaranteed that purpose, values and learning principles are constantly discussed at all levels. 

The management functions are not tied to certain people. Team members should be cordially invited to take on management functions temporarily. They must then be given time for it. It is up to the management 3 function to arrange time and the chapter lead helps as responsible for the human ‘resources’. In other words, during the sprint planning meetings it is recorded which team members invest time in management functions and thereby less on regular team member activities. 

Read also:

• Learn from agile coach practices at Spotify, a thought agile organization (2019)
• Observations and reflections about the business agility conference in Vienna (2019)
• Are the customer and innovation really in the center of business agility in companies? (2019)
• Agile structure is the panacea for learning in organizations and so for agility (2018)
• Governance of purpose-driven work in municipalities using an agile mindset (2018)
• The two blind spots of business agility: Allocating resources and Accountability (2018)
• Viable systems in network of teams for business agility in complex environment (2018)
• Build collective intelligence for excellence (2018)
• Purpose driven work using an agile mindset in municipalities (2017)
• Strategic agility with a top Management Team and weekly pizza sessions (2017)
• Customer delight with agile in an ecosystem(2017)
• Role of HR in the age of agile (2017)
• HR & leadership development in an agile environment (2017)
• Agile tribeleader is a spider in the web of teams (2017)
• Agile works three-leadership roles autonomous teams(2016)