Many companies may ask: Why Agile?
For a better understanding, let’s assume two different companies: One is a traditional company, another one is an Agile company.
“Traditional company” has a reporting hierarchy: The higher levels make decisions for the lower ones. Departments are split into different business areas (for example, Product, Engineering and HR). Teams below the departments report to them. Stakeholder and clients request Features to the Product Team, who refines the requirements. The engineering department develops these features into reality. Budgets are approved by Management before the departments and teams can implement anything on what they want to do.
The Agile organization is set up towards markets. In the centre are core teams, who are serving and financing value stream teams serving different Market Segments. Each team is responsible for requirements, development and service/maintenance within their Market Segments. They have sufficient manpower and competence to do so. Stakeholders, Customer Support and other Clients are all outside the circles.
The most significant differences between the 2 companies is their setup. And that leads to a question: So, we re-organize our organization into circles. Is that, what agile is about?
Well, here it becomes a bit more complex. The answer is Yes and No. The different organizational structure is not self-service. It is a consequence of the Agile mindset.
Let’s, looks at our 2 example companies again and how they respond to upcoming challenges, which they could not foresee.
The Generic Company will have a hard time to generate solutions for the challenges. The fixed and inflexible organization restricts it. The teams are not set up to adapt to changes, as they would need coordination between the departments.
Management may set up a cross-functional task force with members of different departments. They will spend a lot of time to establish a common understanding of the challenge. Then, they hand over to the different departments to plan, what it means to each of the department. They will develop individual plans for Manageemnt for sign-off before being able to implement them.
Sometimes, the different plans are not coordinated between the departments; or it takes a lot of time to ensure its alignment.
The Agile company will enable quickly a clear understanding of the challenge as the decision-making lies with the small teams. The value streams support already adapting to changes, and the members of each team know of their responsibility.
Establishing a common understanding and alignment is much easier in small teams. This enables value stream teams to implement faster and learning faster.
With smaller teams making independent and decentralized decisions, the company already responds to any challenge.
Let’s stop talking about generic challenges and put it into a real-life experience we all had. One of the greatest challenges for most organizations was to enable teams to work from home, as soon as the Corona pandemic hit us.
The traditional organization would need to set up a task force, which holds the control. It would need to make sure, that each department is following the plan. This gives the organization a lot of control on how to make it work. But it makes the organization slow to respond to the changes.
In the Agile organization, decision-making powers lies already within the value stream teams. With that in mind, the teams are then deciding by themselves on how to make it work. They can move to work from home as soon as they are ready. If there is a need for approval from Stakeholders, they can connect directly to the relevant ones. There is no need to involve Management.
This also makes the transition back to work from the office and “enforce policies” less painful. The Agile organization has the policy in its agile mindset: The team itself decides, how it works most effectively.
As illustrated above, an Agile organization enables decentralized decision-making. If set up similarly as above, it lets the value streams decide by themselves on how to work together.
As opposed to many Agile transformations, in which it is the focus to create a new way of working on top and imposing it on teams, this organization focusing on empowering the value stream teams to make the right decisions. The value stream teams are much closer to their respective stakeholders and clients. Naturally, a changed way of working is still important. But the decision on how that might be looking like is totally up to the teams themselves. They might use Scrum, Kanban, SAFe – it is not relevant.
The current challenges of the world demand organizations to be more responsive to outside challenges. Organizations need to be resilient to bounce back from surprises. We achieve resilience easier through decentralized networks, than through single nodes of control (and failure). An Agile mindset helps to achieve this. But what is this fuzzy thing called “Agile mindset”? Stay tuned for the next articel.
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