Tuesday, November 8, 2016

Give me an agile work environment …

Agile is an attractive option for organizations operating in a world of change and disruption. The agile organization is set up from values, like empowerment, trust and a culture with servant leadership and autonomy of teams are of the highest priority. Based on these values a context-based organizational structure is built up. An agile transformation process requires brave management, a holistic approach and transparency.

I write about work- and learning Ecosystems and as an example I present the agile working environment. I spar with Jeroen Molenaar, agile consultant for ING. In this first article we will discuss the importance of values and culture. In the second article, we will discuss leadership at both management team, tribe and team level.

The agile environment is mainly used in an environment where something needs to be developed and often programmers (IT) and data analysts are involved. Agile has its origin in the IT sector and you may observe that enterprises in other sectors have started applying the same agile principles (automotive: Nuon Solar Challenge, aircraft, as well as marketing departments). The agile work environment is an interesting option for organizations facing a market undergoing change, where the word disruption is buzzing around. The time-to-market for new products is much shorter and that requires entrepreneurial and learning employees. In these times of disruption, courageous leaders and employees are essential, people who dare to ask the pertinent questions and people who dare to enter new paths whilst learning. The great and grand 'old' companies cannot afford to buy only some exponential start-ups, they will have to do it themselves. The agile environment offers interesting perspectives, in areas where customer services and IT (e-services) work together.

Brief Description of agile working environment
Spotify is one of the first "agile" companies and they managed to achieve an agile working environment on a large scale (more than a few teams) and ING was subsequently inspired by Spotify. Henrik Kniberg has published numerous videos on how the agile work environment is shaped at Spotify and how it works. The agile working environment is characterized by a variety of new concepts: teams are for example called squads, on average consisting of eight members. Squads are to a large extent autonomous and words like self-reliance and personal responsibility are key. At ING, you see many interdisciplinary squads staffed by roughly three groups: customer journey experts, engineers (IT) and data analysts.
Figure 1: Henrik Kniberg & Anders Ivarsson (2012) at Spotify
Each squad has a product owner (PO), who is responsible for the ‘what’ and ‘why’ of a squad, a form of task and purposeful leadership, how it is realized is up to the squad itself. A tribe consists of several squads and includes up to 150 people, which seems to be the maximum number of faces that you can remember (Dunbar number). Alignment is an issue; hence product owners of a tribe, together with the team leadership of the Tribe, come together on a regular basis (every 2 weeks). Results of that meeting are transparent with post-it notes stuck on the portfolio wall.

A chapter is a group of people sharing a particular competency and chapter members are employed in different squads. The lead chapter is responsible for the performance cycle and acts in his own squad as an ordinary member. All this is supported by so-called agile coaches.

The energy and entrepreneurial spirit of the ING squads splashes from the screen and it is tempting to copy such an approach, especially from a business perspective. However you just should not copy it, but get inspired.

Brave management 
The agile environment aims to maximize autonomy of teams and as management this is a choice. I have much respect for the ING MT for daring to enter their transformation in this way. It shows courage to delegate many tasks and responsibilities to the teams and that you see your own role as being supportive. If you expect entrepreneurship from employees, well you do not have another option. It shows courage to stimulate experimentation, being aware of associated errors. In short, management must dare and want to review its own role. It's echoing Hamel (2012); work is not about your position but about your contribution in work (meritocracy).

Holistic transformation process in a learning company
Scrum and agile come from the IT angle and it is tempting to say as IT department: we go for agile. That is far too short-sighted, agile is about values, it is a holistic story and it's not an instrumental trick. You do not organize it just from the IT department, since this is a corporate matter. It is also an interdisciplinary story; customer service and IT for example will work together. At Spotify agile is based on empowerment, trust and cooperation. At ING they say a little provocatively that hundreds of (middle) managers have gone to 13 tribe leaders. Obviously leadership functions will be fulfilled in new fields, but it is quite a statement! And since we are talking about an organizational transformation, it is not something you realize from one day to another. It is a transformation process that takes years, a process with many experiments, with lots of reflection meetings. This takes time. Jeroen Molenaar, agile consultant for ING, argues that ING has become a learning company. He also says that one should realize that they had been working on it for many years before they made this choice for the agile organization.

Transparency on the wall
In the agile environment the requirement for transparency is beyond dispute. All the walls of the working areas are covered with colored sticky notes. On the portfolio-walls, all projects and activities of each squad are visible. Every day squad members work with the sticky notes, for example, in the daily stand-up of 15 minutes. We also saw this at Menlo Innovations; ensure that all projects and activities hang transparently on the wall. As an IT company do not fall into the trap to store it only in the cloud or in an IT system. Agile tells us that people and their interactions are more important than processes and tools (see agile manifest, my blog and Pentland, MIT).
Figure 2: How to win a solar race using scrum
First, values and culture and then the organizational structure 
At Spotify they are explicit; you base your organization on values and subsequently a culture follows.
Figure 3: Values, culture and structure in Spotify
At ING they introduce a cultural change and call it the Orange code. The structure and processes are serving to it. And when you've got that clear, you design an organizational structure that fits your history, with your business and your context. Spotify also categorically denies that it has a model. It is tempting to begin with squads, chapters and tribes but that should just be the final chapter.

The organization structure is crucial in order to achieve a work- & learning Ecosystem. The point is that the organizational structure results from the values of the organization where trust in employees, teams and autonomy are key. You have to think through the implications of your values and principles and understand them very well, in order to achieve an agile organizational structure that fits your people and your business. And when you have organized that, then all the cooperation and interaction processes are much easier to realize; for example to give each other feedback and receive it. It will become quickly obvious that work experiences mean learning or in other words that everyone is busy with 'sensemaking'.

Leadership has a key role in the transformation process to an agile work environment. In our next blog we discuss the leadership roles in autonomous teams.

For more information on a work and learning ecosystem: see my blog. I am writing a book about a work and learning Ecosystem in times of great change, with the case of the Agile work environment.

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