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Agile Organization Design
LvYi @ Odd-e
Introduction
What is organization?
“An organization is a
social entity that has a
collective goal and is
linked to an external
environment.”
- Wikipedia
Organization Design
Star Model
Strategy
• Set the organization’s direction
• Encompass company’s vision and mission, as
well as its short- and long-term goals
• The cornerstone of organization design
process
Structure
• Determine where formal power and authority
are located
• It comprises the organizational components,
their relationships, and hierarchy
• It is what is shown on a typical organization
chart, including roles and responsibilities
Processes
• Structure alone creates barriers
to collaboration
• Lateral capabilities to overcome
(from informal to formal)
Rewards
• Metrics help align individual behaviors and
performance with the organizational goals
• Reward and recognition system
communicates what the company values
People
• The people (HR) practices create organizational capability from
the many individual abilities resident in the organization
• Different strategies require different people practices in the area
of selection, performance feedback, and learning and development
Agile
Organization
Strategy
Organizational
Capabilities
Origin of Scrum
Scrum in the Context
Strategy Product
Organizational
capability
Speed and flexibility
Organizational
design
(explicit) Structure and Processes
(implicit) Rewards and People
Agile transformation is to
increase organizational agility
Exercise:
What is Organizational Agility?
Doing and Being
Practices
Culture
PerfectionVision
Create the organizational ability to
respond to changes by being able to
deliver or change direction at any time
without additional cost
- Craig Larman
- BasVodde
Agility is the ability to create and respond
to change in order to profit in the
turbulent business environment.
An enterprise’s ability to take advantage of
opportunities, respond to challenges, and
to do so while controlling risk.
- Jim Highsmith
- Ken Schwaber
Performance
• Speed
• Flexibility
• Value
• Quality
• Productivity
Begin with
the end in mind
Agile organization design workshop
M-MGW
We believe that fundamental changes needed in our
minds to succeed with this journey are as follows:
• More people initiative and less top down control
• More team players and less individual heroes
• More courage and less risk avoidance
• More conversations and less one way communication
• More personal growth and less comfort zone
My own experience
• Quality crisis
• Responding to change
• “I felt that our organization were like a
school where we learned together”
Structure
Organizational Structure
Functional
Product
Customer
Exercise:
Understand basic structures
Functional Structure
+ Knowledge sharing
+ Specialization
+ Leverage with vendors
+ Economies of scale
+ Standardization
- Managing diverse products
or service
- Cross-functional processes
Product Structure
+ Product development cycle
+ Product excellence
+ Broad operating freedom
- Divergence
- Duplication
- Lost economies of scale
- Multiple customer points of
contact
Customer Structure
+ Customization
+ Relationships
+ Solutions
- Divergence
- Duplication
- Scale
Scrum Roles
Product Owner Team ScrumMaster
Scrum Teams as
Organizational Unit
Cross-functional Team
• All skills needed to build
the product
• Balancing specialization
with generalization
• Close cross-functional
collaboration
Self-managing Team
Team together has the authority to:
✓Design, plan, and execute their task
✓Monitor and manage their
progress
✓Monitor and manage their process
Authority Matrix
Feature team vs.
Component team
Item 1
Item 2
Item 3
Item 4
...
…
system
comp
C
Team
comp
A
Work from multiple teams is required
to finish a customer-centric feature.
These dependencies cause waste
such as additional planning and
coordination work, hand-offs
between teams, and delivery of
low-value items.
Work scope is narrow.
Product
Owner
comp
B
Team
comp
A
Team
comp
B
comp
C
Item 1
Item 2
Item 3
Item 4
...
…
Team
Wu
Product
Owner
Team
Shu
Team
Wei
system
comp
A
comp
B
comp
C
Every team completes customer-
centric items. The dependencies
between teams are related to shared
code. This simplifies planning but
causes a need for frequent
integration, modern engineering
practices, and additional learning.
Work scope is broad.
Component teams Feature teams
www.craiglarman.com
www.odd-e.com
Copyright © 2010
C.Larman & B. Vodde
All rights reserved.
Feature team vs.
Feature project
Product Project
Exercise:
How does Scrum team
support your strategy?
Management
in Agile organization
Exercise:
Where do they fit?
Product Owner Team
ScrumMaster Others
Product Management
Product Manager as
Product Owner
Change!!!
✓ Product Manager is used to “throwing the project over the wall”
and holding engineering responsible for meeting needs.
✓ Scrum puts this responsibility back on the Product Owner and
customers through the inspect and adapt and the Sprint Review.
Make decisions regarding ROI every Sprint end.
Project Management
Distributed Project Management
Avoid or Transform PMO?
http://blog.odd-e.com/yilv/2014/10/the-future-of-project-managers.html
People Management
Manager as
ScrumMaster?
Experience report
from Nokia Siemens Networks
Agile organization design workshop
Fewer Managers?
• Probably yes, with flatter organization
• “My ideal is to have one supervisor for every one
hundred workers” - Ishikawa
• My experience: 3-5 teams for experienced manager,
2-3 teams for new manager
Processes
New Product Development
Iteration
(Processes around Scrum)
Scrum in a Nutshell
From Ready to Done
• Sprint, from Ready to Done
• What happens before Ready?
• What happens after Done?
Exercise:
“Value Stream Mapping”
Before Ready
Is Release Planning
predictive or adaptive?
Stop Contract Game
release N release N+1
repeat
cross-functional
Scrum feature
teams do all work
so that product
can potentially be
released each
iteration
a 2-4
week
iteration
true
release
potential
release
potential
release
continuous product development eliminates projects in
product development; there is simply an ʻendlessʼ series of
iterations, each of which is similar in activities and each of
which ends in a potentially shippable product increment
Product
Backlog
www.craiglarman.com
www.odd-e.com
Copyright © 2009
C.Larman & B. Vodde
All rights reserved.
Dual-track Scrum
Discovery Delivery
Opportunity backlog Product backlog
Discovery team Delivery team
Collaborative Self-organizing
Continuous Scrum flow
Getting Ready Getting Done
After Done
“Undone” work
Plan
Review
Plan
Review
Plan
Review
Plan
Review
Release?
Undone Undone Undone Undone
Plan
Review
Delay
Risk
Release
Stabilization
Sprint
“Undone” unit is a trap!
Extending “Done”
Planning
Analysis
Architecture,
Infrastructure
Coding
Design Testing
Performance
User
Acceptance
Pilot
Live
Continuous Delivery
• From sprint-based delivery
to continuous delivery
• Customer impact assessment
Flow
(Processes around Kanban)
Kanban in a Nutshell
Visualize
Limit WIP
Manage flow
Explicit polices
Feedback loops
Improvements
Kanban System
Maintenance
Exercise:
Maintenance Models
Challenge with Scrum
Kanban in a Nutshell
Visualize
Limit WIP
Manage flow
Explicit polices
Feedback loops
Improvements
Continuous Improvement
At regular intervals, the team reflects on
how to become more effective, then
tunes and adjusts its behavior accordingly
Sprint Retrospective
Release Retrospective
ImprovementVision
• Emerging
- The most painful problems from the past
• Envisioning
- What is the perfection?
Rewards & People
Performance
Evaluation
Exercise:
Why Performance Evaluation?
Functions of
Performance
Evaluation Feedback and
Communication
Staffing and
Development
Coaching and
Guidance
Improvement
Compensation
Legal Document
Rewards
“I hate my work, I only
do it for the money, i
don’t want to think for
myself, indeed, I’d rather
just do as little as I can.”
“I like to work, it’s part of
my life, i want to do well,
and I will work hard if
given the responsibility
and recognition I deserve.”
Video:
Drive by Dan Pink
1.
2.
Compensation
• Make sure the promotion system is unassailable
• De-emphasize the merit pay system
• Tie profit sharing to economic drivers
Autonomy
Mastery
Purpose
Exercise:
How does Agile help “drive”?
Improvement
Management By Objectives
“Improving systems and
processes improves the
performance of the
organization.”
“Individual improvement initiatives are most effective when
they are combined with serious efforts toward improving
the work climate, systems, and processes.”
“Improving individuals’
performance improves
organizational performance.”
“Remove barriers that rob people in
management and in engineering of
their right to pride in workmanship.
This means, inter alia, abolishment of
the annual or merit rating and of
management by objective”
W. Edwards Deming
Performance Metrics
Performance
• Speed
• Flexibility
• Value
• Quality
• Productivity
Metrics for Agile Adoption
• The ratio of fixing work to feature work
• Cycle time
• Number of defects escaping to production
http://www.estherderby.com/2011/10/metrics-for-agile.html
Measure Organizational Agility
• Frequency of releases (months)
• Stabilization time for releases
• # of customers on current release
• Time to get small change to customer
• Maintenance as % of development budget
• Total defects
• Customer satisfaction
• Employee satisfaction
Exercise:
Leading vs. Lagging metrics
Measurement Dysfunction
Span of Control
Span of Influence
Team Goal
• Give all of the members of an Agile team
the same performance goals
• “How did you help achieve the team goal?”
Values and Behaviors
Culture
• Behavior is the manifestation of
an organization’s culture
• No matter how clearly the
organization’s values are stated,
it is the way that people act that
defines the culture
Agile organization design workshop
Exercise:
Vital behaviors
Development
Team Development Goals
• Baseline current
team skill profile
• Define team
development goals
• Align individual
development goals
Individual Development Goals
• Set individual goals for
individual development
• Make sure individual goals
are aligned with team goals
Generalizing Specialist
• Avoid job titles and
job descriptions
• Try simple general
job descriptions
Manager as Coach
• Teach at work
• Toyota coaching Kata
• Mentor/Mentee dialogue
• Supported by A3 report
Staffing
Self-organizing into teams
Team Behaviors
Value highly the personal
traits, characteristics, and
behaviors of good team
members
Team hiring
Reference
Agile organization design workshop
Agile organization design workshop
Agile organization design workshop

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Agile organization design workshop