The objective of this article is to set out the following provocations: can there really be a single formula for the creation, and evolution of organizations? Is the work of Taylor, Fayol and so many others that brought us this far, with all their merits, still the thing we need in order to move forward?
At the end of the 19th century, when Taylor designed the foundations of standardizing the management models still used all over the world, there were no computers or the internet, and we lived in a completely unconnected world.
The mechanistic vision of organizations focused on studies of time and movement. It followed the principle that to achieve the highest productivity, workers should follow rigid standards pre-established by management, often to the detriment of the human beings taking part in the process.
For instance, Fayol stated that in order to achieve success, a manager must engage in five main activities: planning, coordination, communication, command, and control. Management was conceived from the principle that the head of the organization holds all knowledge and therefore its role is to determine how the work should be done.
Based on military structures, a hierarchical organizational model with multiple layers was developed, in which those above commands and control those below.
In his brilliant 1936 film Modern Times, Charles Chaplin showed how humans were being considered cog in a giant machine which can’t be stopped. “Human resources” have to be commanded and controlled, since they won’t be able to produce value on their own.
They should be made to arrive at 9 a.m. and not allowed to leave before 6 p.m. Resources don’t need motivation, but rather the whip. This mindset for resources is still very present nowadays. Who hasn’t been in a work environment where they felt they were just a number?
Perhaps not even Taylor could have imagined, just over a century ago, that today’s organizations would have become a parade of hierarchical levels, in which dozens of layers, departments and control organisms cause their internal complexity to rupture, causing widespread paralysis.
It’s as if our current companies were actually inspired by the Titanic: large, heavy and too slow to react to a simple iceberg.
In a globalized world, with new technologies emerging the whole time, it’s as if we were constantly surrounded by icebergs. The challenges of the 21st century are infinitely greater and more complex than the reality known by Taylor in the late 1800s.
As we’ve all learned, the traditional management principles weren’t designed for the reality facing us today. A new paradigm is needed, a new way of thinking and acting. What we need is a new mindset.
But what reality is this that demands new paradigms? What characteristics of today differ from those of our forefathers and their working methods?
We live in an absolutely complex world. New technologies from one moment to the next, redefining behavior and setting new consumer standards.
At the same time, increasingly large and more complex organizations emerge, which act globally, and deal with a vast diversity of cultures, behavior, and different realities.
All this contributes to a high degree of uncertainty. We haven’t been prepared to deal with so much uncertainty.
The growth of education, like technology, has allowed for the creation of an army of creative workers which clearly don’t fit into the classic definition of “human resources”.
Creative professionals are completely different: they prefer to forget their own path, often work in teams, enjoy environments with a high degree of freedom and, fundamentally, seek professional satisfaction through intrinsic motivation.
In constant change
We live in a world that is turning ever faster. From technology to the clients’ needs, we must understand that the world is changing at an amazing rate. The worst solution we can deliver for a two-year project would be exactly what the client asked for on the first day.
Probably the solution will already be obsolete on delivery. Heraclitus said: “Nothing is permanent except change.” But even Heraclitus himself would be surprised by the rhythm of changes we face today.
In the old days, work was organized in such a way that each person worked on one part. I have my tasks, and you have yours. Today we work in teams. Teams are made up of people with a common purpose, organized to maximize collaboration, to deliver value as soon as possible.
Real teams share responsibility and continuously collaborate to deliver the desired result. There is no such thing as “my task”, but rather “our objective”, so we need a new way of working in order to heighten collaboration between people.
Creative and innovative organizations are extremely collaborative.
Digitalization has moved from a tendency to become a reality. The redesigning of products and services to digitally transforming the relationship between companies and their consumers has broken paradigms and brought new challenges for organizations.
It’s been an enormous challenge reducing the time-to-market of products and services, making it possible to increase the offer without necessarily increasing the number of employees, and embracing new digital technologies.
Perhaps the greatest challenge may be to understand that we’ve become so complex and slow and that our clients aren’t going to wait. We need to adapt right now!
Once again: management as we know it was fundamental in getting us this far. But it’s clear that the challenges facing us up ahead are different, so we’ll need to find news ways from now on.
We must adopt a new attitude, a new way of thinking, and then rethink management structures, concepts, and paradigms. This new way has a name, and it represents the mindset of the world’s most innovative organizations: Agile.
One of the main characteristics of organizations which adopt Agile as a management paradigm is the lack of separation between those who think and those who do. Self-organized and self-managed teams organize themselves around a product, and have total autonomy to decide their future.
There is no hierarchy within the team, since that would clearly limit its self-organization. This structural change represents a break with the traditional model of project management, where the all-powerful project manager defines the entire planning and then the team executes the plan.
In fact, in environments with a high degree of uncertainty (both commercial and technical), the project management approach already makes no sense at all. It demands a prior planning of actions to be executed, which is impossible when there is high uncertainty and changes take place the whole time.
It no longer makes sense to ask: “When will the final product be ready?” We don’t know what “final” means since the creative process of building products is based on short cycles, continuous improvement, and constant learning. Developing a new product requires a mindset of discovery, not execution.
Agile teams set out from the problem to discover the solution along the way. In an interactive and incremental way to incorporate knowledge acquired and causing frequent changes of direction in the search for the best product possible.
Project teams pre-define the solution at the start of the project and avoid change at all costs because change will ruin the initial plan, and therefore damage the project.
Time, cost and scope are fixed in the traditional world, because that used to be the only way of achieving any stability with regards form.
In the 21st century, the reality is completely different: time and cost may still be fixed, but the scope changes every time we learn something.
I’d like the explain this difference in thinking with a simple example: the difference between offline GPS and Waze. Offline GPS generates an initial plan based on the knowledge available at that moment, but the plan is fixed, so it ignores what happens along the way.
No learning is possible. You start with a vision of the ideal route, but as GPS is offline, it doesn’t learn with our behavior. It therefore doesn’t change the original plan, ignoring bottlenecks or accidents up ahead. The route stays the same, even if it’s not the best way of getting to the destination.
But Waze adapts the whole time, suggesting new routes following with the situation up ahead. The objective of the constant reviewing of the direction is to deliver the best (and fastest) route possible according to the data available each second.
“Responding to change over following a plan” is part of the Agile Manifesto. It´s a fundamental value for understanding Agility.
However, for a Team to be self-organized and self-managed, an organizational redesign is needed, because traditional structures weren’t designed to allow teams to actually become high-performance structures.
There are a few fundamental differences in this structure which need to be explained. Agile Teams have the following characteristics:
Multidisciplinarity means the Team has all the knowledge it needs to fulfill its objectives. This inevitably means an organizational structure designed from the point of view of product development, not product management.
Especially in tech firms, the presence of functional teams (of specialists) forces them to take care of just one stage of the building process, leading to an extremely inefficient time-to-market.
The baton is passed between teams via tickets in a system, generating additional documentation. Agile Teams don’t have external dependencies because all knowledge is contained within the Team.
Agile Teams take care of the whole process of development, production, and support, eliminating the passing of batons and greatly reducing the time needed to put a new version of the product into production.
So multidisciplinarity doesn’t mean everyone is an expert at everything. Agile Times sit together and constantly collaborate, with the objective of eliminating waste and problems of communication and collaboration.
Traditional hierarchical structures lead to a reduction in the empowerment of people. The greater the hierarchy, the less autonomy there is. However, Agile organizations are more horizontal, which naturally implies empowered teams.
Teams with low empowerment lose their capacity to experiment and, worse still, create bottlenecks in the decision-making process since it’s the manager who makes all the decisions. Bottlenecks in the decision process increase the time-to-market, reduce innovation, and block learning.
Obviously, the decision-making process isn’t an on/off switch but rather a process of continuous learning. Agile teams aren’t just empowered to decide about things which impact them. They decide about their path forwards, technology, tools, next steps, how to resolve problems, etc.
Don’t forget that a high degree of empowerment brings with it great responsibility (and accountability), something which is very desirable in high-performance environments, but which can be seen as a risk in more politicized workplaces.
This practice is also very difficult in environments with a strong competitive culture.
It is a fact that high-performance teams are invariably small. There’s one very simple reason for this: adding people to the team greatly increases the workplace complexity (communication, organization, time spent in meetings).
Apart from the fact that this creates silos, which itself impacts negatively on knowledge management. Jeff Sutherland, the creator of Scrum, says that we can follow the traditional recommendation of teams of three to nine people, but he himself adds a caveat: never get to nine. I agree.
None of the best teams I’ve worked in over the past decade were larger than six. Taking into consideration the fact that these Teams are multi-disciplinary and self-managed, being small really does make everyday life much easier.
Many companies still treat people as a resource, throwing them back and forth, always with the excuse of solving last-minute crises.
I can’t understand how it is that organizations still don’t realize what a vicious circle this is: sending people back and forth only creates more crises because the exchange of knowledge is always so poor, management is in a constant state of madness and productivity is invariably low. Teams need stability.
Stability generates predictability, and so we must avoid changing the team formation at all costs, since that has a direct impact on the capacity to estimate, plan and organize the work to be done and resolve problems.
Stability means the products come and go, but the team remains together to face the next professional challenge. We don’t destroy teams when the product is finished, because all the refinement of processes, communication and collaboration will be lost.
The characteristics listed above are structural, in other words, they depend on the participation, support and total commitment of management so that all those involved understand their new role and problems arising from the transformation process are addressed and resolved.
One can’t expect the transformation process to proceed quickly and painlessly. Changing an organization’s culture requires constant effort, everyone’s attention, and, especially, patience.
It must be understood that mistakes will be made, but that the benefits will by far exceed the problems. Those who achieve change will be more efficient and effective and have a fundamental competitive advantage to continue to evolve in a world of increasingly profound and frequent changes.
Short cycles and continuous improvement
The Agile movement is based on four values and 12 principles. However, there are two elements that help us clearly understand the paradigm change in the development of products and services: short cycles and continuous improvement.
– Short cycles
In traditional project management, there is a big planning phase and a big execution phase. In the first, everything which needs to be done throughout the project is planned, so according to this traditional mindset, changes should be avoided.
This concept is known by the acronym BDUF (Big Design Up Front). The problem with the BDUF approach is that it doesn’t work in environments with uncertainty, constant change, or learning processes along the way, in other words, it doesn’t work in the 21st century.
This is why it is necessary to think in short cycles. Short development cycles allow the planning to be adapted as learning increases, and the uncertainty is reduced.
One can work with only the level of detailing needed to get to the next cycle, thereby avoiding waste and opening up space for us to use everything that’s been learned, up to the next cycle. Short cycles also usher in space for continuous improvement.
– Continuous improvement
This is perhaps the best-known characteristic of Agility and means that from time to time, the Team reflects on its work process, to find new, more efficient and effective ways of carrying out the job.
The Teams reinforce positive behavior and create an action plan of improvements to be adopted as they move ahead. This process leads to the building of high-performance teams.
In the end, it is necessary for everyone in the organization to be involved: from management to HR. From legal to accounts. The process of Agile transformation must occur in all four domains of Agility: business, cultural, organizational, and technical.