http://www.digitalistmag.com/future-of-work/2017/10/04/self-managed-organizations-self-delusional-or-future-of-business-05401162
4-October-2017 | Future of Work
Self-Managed Organizations: Self-Delusional Or The Future Of Business?
Guenter Pecht-Seibert
If you have ever attended a stand-up meeting, you know people do just that—they stand. Why? Because standing reminds them to keep their comments short and to the point. Software development teams use scrum-style daily stand-ups to keep team members connected, share information quickly, and identify issues before they turn into problems. They know something other teams don’t: Their work is complex, no single individual has all the answers, and hierarchies can get in the way of innovation. So, methods that create more connected, self-managed work—like daily stand-ups—are key to creating innovative software.
Scalable efficiency just doesn’t cut it anymore
Today, businesses are waking up to the realities of this increasing complexity and warp-speed innovation. Whether they like it or not, the pressure to innovate and to re-invent themselves again and again is high. Looking back into the 1950s makes this apparent. In 1958, a Standard &Poor’s 500 company could hope to be around for an average of 61 years. Today, most survive only about 18 years on average. And 52% of all Fortune 500 companies have either experienced bankruptcy, been acquired, or gone out of business entirely between 2000 and 2014.
So increasingly, business leaders are seeing their industrial age organizational structures are failing them. Why? Because industrial age command and control management practices were established during the early 20th century. At that time, a low degree of automation, a poorly educated workforce doing manual tasks, and ill-informed customers in stable mass markets were the norm. The main goal of companies was scalable efficiency. Hierarchical management practices were necessary so that a few educated people—called managers— could instruct less educated people on how to complete tasks.
Today, we have a highly educated workforce. This trend will continue; the latest numbers tell us that by 2025, almost two-thirds of the U.S. labor force will likely need some education beyond high school. We also have highly informed customers, who are social media-savvy and who can’t be fooled with insincere marketing. And most importantly, we are experiencing a degree of automation like never before. Companies can no longer differentiate themselves through scalable efficiency—their goal now is to become innovative and agile.
Command and control goes the way of the dinosaur
It’s obvious that we can’t respond to these new challenges with traditional management approaches. More creative work done by diverse workgroups require more flexible, collaborative and open structures. And while routine tasks increasingly become automated, creative work is also expanding and evolving. Traditional command and control attitudes, and the hierarchies that maintain them, will be replaced by networks of self-directed teams doing work that extends beyond the boundaries of individual organizations. Finding new ways of coordinating work across organizational silos is no longer a luxury, it’s an imperative.
Seven things self-managed organizations of the future will need to do differently
Are business leaders turning to management gurus or consulting companies or science for new ways to structure work? Increasingly, they are turning to leaders in software development—not only for software solutions—but also for insights into how to “do” work in the future. The driving assumption is that businesses will need to radically redesign work environments to move from top-down “machines” to self-managing organisms driven by a higher purpose beyond increasing revenue.
Here are seven things I believe self-managed organizations of the future will need to learn to do differently so they can move from scalable efficiency towards innovation and agility:
1. Find and follow a higher purpose. Define the “why” behind the endeavor.
In the absence of control, purpose keeps people focused. It provides direction. Purpose addresses a basic human need for meaning and defines the reason why a company exists—beyond pure profit. It includes a responsibility for society and the environment. But to be serious about a purpose, every element of the business needs to align around it: culture, strategy, and brand.
2. Understand that mutual trust is the glue that binds people together.
Employees must trust in their leaders, but equally important is that leaders trust their employees to act in the interest of the company.
3. Create a culture where leaders empower people to take more responsibility for success—and just as importantly, for failure.
The leader can no longer be seen as a scapegoat for failure. Team members have more opportunities to take personal responsibility for results. This has implications for how we set up teams, conduct performance evaluations, and incentivize success.
4. Consider the team setup carefully to foster more accountability and autonomy
Not only who is on a team, but how they got there is important. Provide opportunities for people to choose their project assignments. Enable some self-assignment to tasks and responsibilities, recognizing that people are more motivated when they decide where they can best contribute their unique talents. Ensure the team setup is as diverse as possible, recognizing that innovation depends on a diversity of thought and experiences. Include all the roles in the team that are necessary for it to succeed, and set them up to ensure end-to-end responsibility for the outcome.
5. Change the way you incentivize people.
Incentivize for innovation: Experiment with an “Innovation Account.” Recognize that people need time to innovate. Allocating just a couple of hours each week to innovation won’t lead to the next breakthrough innovation. Enable employees to “bank” their hours and then step away from their current role for a larger chunk of time to accomplish something truly innovative. Consider that bonuses and other forms of variable pay make most sense when people feel they can have a direct impact. Instead of linking variable pay to company-wide performance measures, map them to the things people can actually impact or contribute to.
6. Understand that peer group competition and team pressure are powerful motivators.
In self-managed teams, the onus on “doing the right” thing for the team is high because members have a lot more information. For example, the temptation for members to blow the budget on that first-class plane trip is low, since the team has transparency into the budget spending too So replace today’s typical management controls with mechanisms that promote more information-sharing within the team. Also, people tend to compare their own group’s performance with the performance of other teams. So, healthy competition among peer groups keeps people focused on helping each other succeed on their team’s mission.
7. Empower distributed decision intelligence to increase decision quality and foster ownership and autonomy.
Decision power should go to the people who are affected by the decisions. Empower employees, put them into charge, give them more freedom, but also ask for more self-responsibility in return.
Learn more about a recent joint study by SAP and IXDS on how businesses can redesign work environments to support radically new work practices.
About Guenter Pecht-Seibert
Guenter Pecht-Seibert is Global Vice President of the Future of Work at SAP Innovative Business Solutions. Guenter and his team understand that yesterday’s rules don’t apply to the future of work. They help organizations leave 19th-century management practices behind, and replace them with technology solutions and management practices that make innovation real for the 21st century.
Tags:
Decision-Making , Innovation , Workplace Culture , Employee Retention , Purpose , Digital Transformation , Employee Motivation , Efficiency , Business Process Innovation , Accountability , Self-Managed Organizations , Scalable
http://swreflections.blogspot.co.nz/2011/03/scrum-xp-and-what-about-self-organizing.html
Scrum, XP and what about Self-Organizing teams?
A foundational principle of Scrum (and other Agile methods) is that we get better results from self-organizing teams. The Agile Manifesto says
“The best architectures, requirements, and designs emerge from self-organizing teams”
so it must be true.
A lot of Agile teams see improvements in productivity and quality. But how much of this comes from people working in self-organizing teams? And how much comes from better control and focus: from breaking work down into smaller pieces, working in timeboxes, holding frequent reviews. From faster feedback and more transparency with the customer. And how much from following disciplined technical practices, like developer testing, and code reviews or pairing, and refactoring.
How far do you need to go to get good, or even exceptional, results? Do you need to flatten down your organization, change your culture, change your management structure, change your HR practices and compensation model, change the way that you work with and communicate with the customer and with other teams… do you really need to change all of this to get better software out faster?
Learning from Survivor
In self-organizing teams, people are supposed to make decisions together, through consensus. Consensus works if you have a team of equals, or near-equals, and nobody (or buddies) can dominate the others. In reality, teams are dominated by stronger personalities or, if they are big enough, cliques.
We can learn some simple lessons from the TV show “Survivor”. Leave some people on an island, and pretty soon you will get politics. Some people will avoid responsibility, retreat from conflict: they don’t want to argue, they just want to get to work. Or they want to find ways to avoid working. Or they just don’t care. Some people will leave if they can find a way out. Others look forward to a good fight, get energized by it, but don’t have staying power or don’t know how to follow-up and get what they want done. So power and influence will go to people who are more articulate, more politically savvy, more confident, better at selling. Or to people who are more determined, more passionate about how work should be done, more willing to push for change, who have more to gain or less to lose. Or to people who are more manipulative and controlling.
These people will emerge as leaders in the group, and now you have replaced the role of management in the organization with new leaders who realize their agendas through cajoling, conning, convincing, ignoring, bullying, pressuring, outwitting, outplaying or outlasting the rest of the team into decisions.
I think that this is why some consultants are so strongly in favour of Agile teams and Agile methods: because in an Agile environment they can exert more influence, have more control over the outcome in a shorter time, play a bigger role on a team and have a chance to dominate it; rather than accepting, fitting into the existing organization and culture and “playing a role”. And if your team is having problems self-organizing and self-managing, well, there are consultants to help you with that too.
Swarm Intelligence?
I’m not convinced that the team needs to, or should, make all decisions together, and that the best decisions are always made by a “collective mind” or “swarm intelligence”. There is an important place for technical leads and experienced designers and technical specialists with valuable experience and skill. And there’s a good reason to let them do what they are good at. Even when you get a consensus-based democratic and fair decision from a team, as John Sonmez points out in When Scrum Hurts: Mob Architecture you tend to get average results, not exceptional results. If you have an expert on your team, why not let them make these kinds of decisions, so that you can aim for something better than average?
Management and Anti-Management
A common argument is that managers are not needed with self-organizing teams in Scrum – instead you have coaches who guide the team through their decision-making. This is part of what Uncle Bob Martin calls the anti-management bias in Scrum
“Scrum carries an anti-management undercurrent that is counter-productive. Scrum over-emphasizes the role of the team as self-managing. Self-organizing and self-managing teams are a good thing. But there is a limit to how much a team can self-X. Teams still need to be managed by someone who is responsible to the business. Scrum does not describe this with enough balance.”
Martin Fowler captured the importance of this balance in The New Methodology
“Such an approach requires a sharing of responsibility where developers and management have an equal place in the leadership of the project. Notice that I say equal. Management still plays a role, but recognizes the expertise of developers.”
The emphasis on equal is his, not mine.
Many people in the blogosphere take the position that if the teams are not self-organizing self-responsible self-directed (good), then the only alternative is hierarchical exploitative bureaucratic Command-and-Control (bad). But we need, and can have, a reasonable, middle path between extremes, a real-world and practical way of working.
Managers, good managers, respect and trust people to care about what they are doing and to do a good job, while still staying actively engaged. They offer direction, help define goals, help set priorities, step in and help when things are going wrong, handle conflict, and take responsibility when the business demands it. Good managers can help a team solve problems – or avoid them – because they have been in these situations before, and learned the hard lessons. A good manager understands that there are decisions that can be made and should be made by the team or by individuals on the team – and that there are other decisions that aren’t the team’s responsibility. That’s what managers get paid for.
Decisions about how to structure teams and how to get work done shouldn’t be about fear, or lack of trust. Or an organization’s culture, or inertia. Or politics. Or the current fashion. Instead, these decisions need to be about what’s best for the business. How to take advantage of all of the skills and capabilities that an organization has to offer – including management. And maximizing this advantage to the benefit of the team and of the customer.
Posted by Jim Bird at 4:27 PM 
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Labels: agile development, leadership, Scrum
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