Version 2.1 – 2021-12-01

Agile Lean Leadership is a way of organizing for customer value, transparency and collaboration. It consists of a set of recommended values, principles and practices

PDF version

Introduction

Agile Lean Leadership (ALL) is a Framework for implementing Agile and Lean practices in the wider organization, not just in special cases or departments as has been common with agile frameworks such as Scrum. We call this “Scaling Out”.

This booklet provides the readers with a solid framework with values, principles and practices to assess and use as guard rails in a transformation of their organization.

Many people have addressed the issue of Scaling Up, moving Scrum and Agile above the concept of a single team. This is part of ALL, but ALL covers many more aspects of creating an organization that can thrive in the modern complex environment.

Challenges today are abundant and multifaceted. We may embark on a journey that seems simple to most of our advisors or superiors, “How hard can it be?” is often heard:

Reality is almost always different, all sorts of unexpected challenges come our way:

The question is how can we prepare our organizations to perform even in such unpredictable and complex situations. The answer is both extremely simple and at the same represent a paradigm shift from conventional organizational and management wisdom: People need to be truly engaged contrary to what they are today. We have to:

• Focus on creating customer value through transparency and collaboration.
• Replace central planning with engagement and commitment of individuals and teams.
• Replace power based structures with trust, common values and common goals.
• Replace extrinsic reward and punishment motivation with intrinsic motivation consisting of purpose, autonomy and mastery.
• Replace monitor and control loops with constant learning and improvement loops.

People are only engaged if they actively choose the organization. Follow us, as we tour the territory of Agile Lean Leadership.

Background of Agile Lean Leadership

A few years back a number of Scandinavian Scrum trainers and coaches discussed the future of organizations and where to go next, now that Scrum and Agile had become mainstream in many areas. We had all been in the game for 10 years or more, and we saw how many competing frameworks tried to deal with “Scaling Scrum” up to large projects. We were more concerned with moving the fundamental patterns found in Agile, Lean and Scrum out into every corner of the organization, reaping the benefits that we so clearly had seen in projects and product development. We called this “Scaling Scrum out”. 

At the same time, this exercise of scaling out also led us to investigate the patterns’ applicability in areas that are not pure knowledge work (which for example software development is) at a deeper level. In the general organization there are many physical boundaries and constraints, it is not all in your head. We need to have solutions for those real-life circumstances as well.

In our respective countries it is considered extremely bad taste to boast abrasively of your qualities, however, we agreed that there was one thing our culture constructively brings to the table: The concept of low power distance. Everybody has the right to be heard and taken seriously. This proves to be one of the preconditions of achieving the benefits of an Agile Lean Organization. In addition, we were taught and inspired by a lot of very clever people:

• We all followed Dave Snowden and his Cynefin framework. That provides an excellent explanation of why Scrum and Agile is needed and why it works.
• Amy Edmondson and her research on the importance of teams in complex learning organizations, pointing to the concept of psychological safety as a vital enabler.
• Anders Dysvik and his colleagues from Oslo BI have highlighted in their research the importance of intrinsic motivation.
• Tom Gilb has since the eighties hammered into our heads the importance of focusing on value, not just effort.
• General Stanley McChrystal and submarine commander David Marquet have in similar ways described how they had to depart from a traditional hierarchical command and control culture to an engaging network of teams model in order to achieve results in complex environments.
• However, we need to highlight that grand figure of W. Edwards Deming, who served so well in the American war production of WWII, later in Japan roughly from 1950 to 1970 and in his autumn years from about 1980 to 1993 trying to persuade American business leaders to adopt a better way.

So we clearly took our offset in Scrum which is a very elegant set of simple, easy to remember enabling constraints. We learned from all the people mentioned above and many more; we tried to synthesize and fuse all these ideas into one coherent concept.

Gradually the definition of Agile Lean Leadership emerged, as a set of extra enabling constraints and patterns for scaling Agile and Lean out in the organization and handling situations above and beyond pure software or product development. We came to the conclusion that there is indeed a rather simple set of extra constraints to add to those found in Scrum. They are easy to follow as a good starting point when trying to build an organization suited to deal with complexity.

Mindset

At the deepest level, Agile Lean Leadership (ALL) is a mindset that governs how we confront challenges, opportunities and decision making, particularly when working together with others in organizations.

It begins with the realization that much of the work we deal with today is in the complex domain where only fragmented knowledge is available, but we still have to act, we cannot just wait. 

During the Industrial Age, much leadership was about getting people to “do” what was already planned by their superiors or experts. Now it is all about getting people to “think” and create novel solutions to challenges.

Today, we are much less in control than we would like and our customary process with big upfront plans and fixed budgets is destined to failure.

It is often helpful to think in terms of Dave Snowden’s Cynefin model. Challenges are placed in the four domains depending on what knowledge is available, this determines how much we can plan outcomes and how much we must experiment to get there.

Although “top-down” management has prevailed since the Industrial Revolution, it has always been more natural for people to solve complex problems by sharing ideas and cooperating in small groups. Now that the Industrial Age is drawing to a close, it is time for new (or rather rediscovered old) ways to think about making organizations work optimally.

The concept, values, principles and patterns of Agile Lean Leadership are a consolidation of many great contributions rooted in Agile and Lean thinking in general. We are especially indebted to Scrum for its Sprints, Roles, Events and Artifacts and the benefits they create. The question becomes how to foster an organization where comparable benefits can be achieved across teams as well, hence our term “Scaling Out”.

The result of introducing Agile Lean Leadership is an Agile Lean Organization (ALO) where work is done mostly in self-organizing teams of committed participants, who are team members by invitation. Each member is a valued and respected contributor, using their skills for the collective goals of the team. They have autonomy, a sense of purpose and license to develop their own intrinsic motivations on the path to mastering new skills and meaningful accomplishments. Leadership and authority is not abolished but exists through process and mutual agreements and honoring commitments.

The mindset of an Agile Lean Organization exhibits some distinctive characteristics:

• Normally nobody uses coercion to make others comply.
• Everybody honors their commitments.
• Everybody involves others through invitation.
• Everybody is willing to be transparent and accountable.
• Everybody signals intent to allow others corrective suggestions.

Fear should not be used as an instrument of management. In Amy Edmondsons words the organization should become “Fearless.”

Values

A set of four core values drives Agile Lean Leadership. The values represent the deepest answers to the “why” question. These values should to a reasonable extent be shared among those who work together in the organization.

Purpose, clear and worthwhile

An organization must have an aim to work towards. The aim should be bigger than any single individual and be more than about just making money. To be useful in binding people together for the long term, its stakeholders must find its purpose worthwhile. The purpose will reveal the organization’s own values.

Sustainability in all things

Sustainable organizations must have a long term view of most things. They should strive to remove waste, avoid draining scarce resources and build up relationships and human capabilities for the long haul.

Resilience in all things

An organization must expect change and unpredictability. The structures and communication channels must be capable of responding quickly to new challenges and opportunities. Everybody must be on the lookout for new knowledge and time should be made for disciplined reflection in order to make sense of things.

Respect for people

An organization must serve its customers, employees, stakeholders and society at large with respect. That includes giving people psychological safety, avoiding force and fear, thus allowing them to grow, develop and have joy and pride in their work.

Principles

To support the values there is a set of 16 principles that people in the Agile Lean Organization (ALO) can refer to when making decisions and choosing actions. By choosing actions that support and strengthen the principles, the organization and its people coalesce around its shared values.

A clear and worthwhile purpose

• At every level, be very clear about the purpose, values and constraints. Most people need to see a higher purpose than just making a living, they will only engage fully if the true values of the organization resonate largely with their own.
• Balance the value created for customers, employees, society and stakeholders. An unbalanced focus will in the long run make the organization less sustainable, party politics will erupt and create tension.
• Hold and display the moral high-ground with integrity and strive to build trust. An ALO lives through trust and cannot be sustained without it, it reverts to empty ceremony. Trust can only be upheld with persistent and consistent demonstration of integrity.
• Remember that the final judge of the quality of a product or service is the customer. No matter how it is phrased an ALO exists to serve a customer, it is the value that the customer experiences that is the true indicator of quality.

Transparency and visibility

• Sustain an unrestricted flow of information up, down and sideways. An ALO starts with radical transparency. If people are to have a mandate to make informed decisions, they need to see reality. Open communication requires psychological safety and willingness to speak up.
• Be in dialog with the customers to fully understand how to benefit and serve them persistently. Ongoing dialogue and continuous feed forward and feedback loops throughout the organization  ensure the best possible understanding of the customers’ values and needs.
• Shorten the distance of understanding between the customers and the organization. Short lines of communication keeps the customer close. Delays and handovers through many layers or departments obscure and distort messages and engagement.
• Create optimal visualization of models, goals, status, progress and impediments. Visual, graphic displays engage people and retain their attention, lists do not. People get the meaning and remember connections when communicating at least two-dimensionally.

Institutionalized learning

• Strive to see and understand the facts in their full context as a system. Most situations in organizations cannot be evaluated in isolation, they are interconnected. To make qualified decisions, the main dependencies in the system must be understood.
• Build up and sustain commitment to constant improvement and learning. At the heart of everything Agile and Lean is constant improvement and learning. The organization must radiate commitment to this, there must be visible time and money allocated to it.
• Strive for collegiate decisions, pushing responsibility as far out as there are people to carry it. People closest to the action have the best information, allow them to decide what to do; of course they must be qualified and have clarity of goals, they may need training to carry the responsibility.
• Balance the need for structure and standards with the need for adaptability and innovation. Every working unit must evaluate its need for structure and standards. Too much will dampen innovation and slow response down; too little will create confusion and frustration.

Respecting and developing people and relations

• Allow people pride of workmanship and a certain autonomy, building them up to their maximum potential. People get joy and satisfaction out of jobs well done, they need to be in charge of their own life and they need to grow; let the organization support this.
• Be willing to serve colleagues, subordinates, customers and suppliers; leadership is a service. Leadership is not a privilege, a leadership role means doing what it takes to make those around you successful, not exploiting them.
• Keep the long perspective on people and relationships; create psychological safety. By taking an investment view instead of a cost view of people, customers and suppliers, good prioritizations become clearer. Psychological safety is a prerequisite for high performance.
• Be transparent and never use fear as a leadership instrument, as fear leads to distortion of data or systems. There is no place for hidden agendas and manipulation. Fear will invoke people’s survival instinct the strongest of all, and they will do anything to protect themselves, including gaming the system and cooking the numbers.

Using the Principles

The principles serve as beacons that light the way for decisions and other courses of action. The radar chart below, shows the principles, resting on the values. Potential decisions are shown as a red dotted line; for each principle, it is estimated how strongly this particular decision supports the principle. In this way several options can be visually compared for consistency with the principles. It goes without saying that a decision should not be implemented that contradicts the principles; people will lose trust immediately.

The Framework of Agile Lean Leadership

A number of basic concepts have been collected from various sources and worked into a coherent and consistent set. In the following discussion we assume the reader is familiar with the core Scrum terminology.

The Team or the Circle

In Agile Lean Leadership we use teams as the operating unit where possible. Teams are self-organizing, cross-functional and able to deliver the products and services on their Main Backlog. They are designed with high internal coherence and low external coupling, so they can operate largely on their own, like a small business.

The Team concept is taken from the Classic Scrum Team, which we have generalized and called a “Circle”. 

• Circles have a few defined roles: Strategy Owner (aka Product Owner), Operations Owner (aka Scrum Master) and Team. 
• Circles have Process Guidelines, an agreed ceremony or a set of events which would be Scrum, Kanban or something else. 
• Circles have Artifacts that provide visualization of important aspects of the work: The Main Backlog, The Tactical Backlog, The Improvement Backlog and the Circle Manifest. Some Circles may choose to work with Scrum, Kanban, or a combination of Scrum and Kanban. 

Under all circumstances, Circles are expected to operate with constant feedback, following the practice of iterations (or cadences) in planning, review and retrospective. Circles are also expected to focus on making their work as transparent as possible.

Circles have Relationships with other Circles, defining how they interact. When a Circle has Relationships with other Circles, they can Delegate deliverables to each other. These are the channels along which value flows in the Value Stream. A Relationship also has a Manifest, that documents the expectations of the two sides of the Delegation.

Circles can be Scaled Up with more than one Team working on the same Main Backlog, or they can be Scaled Down with more than one input (effectively a separate Backlog) to the Main Backlog.

Roles

• The Strategy Owner (SO, like a CEO) is equivalent to the Product Owner in Scrum, looking out at the value generation, towards customers, competitors and society at large. Prioritizing the Main Backlog to achieve the best possible Return on Investment.
• The Operations Owner (OO, like a COO) is equivalent to the Scrum Master in Scrum. This person is responsible for the process in the Circle, its collaboration with other Circles and dealing with impediments and improvements. At the center of the Operations Owner’s work is the relentless focus on constant improvement and constant learning.
• The Team, a cross-functional, self-organizing team that has the necessary skills to deliver whatever is on the Circle’s Main Backlog with as little dependency on other Circles as possible. The Team Members define their own work: they analyse, design, implement and verify the deliverables they produce.

Artifacts

• Circle Manifest. Each Circle has a Manifest which it maintains. The Manifest shows why The Circle exists, what it does, who its members are, who they serve (Customers) and the rules for engaging with the Circle. Often the Manifest will contain a Competency Matrix that shows what competencies the Circle requires, which ones the individual Team Members bring to the table and how well covered the Circle is with respect to competencies. This Manifest is transparent to the whole organization, helps everybody to understand what to expect and will be modified from time to time as circumstances change.
• Main Backlog. This is at a minimum an ordered list of Backlog Items or deliverables for the Circle, it is equivalent to the Product Backlog in Scrum. It is the job of the Strategy Owner to prioritize the work on the Backlog to generate maximum value and make sure that the specifications are sufficiently robust to fulfill the customers expectations. The Circle may choose to have additional Artifacts supporting the full understanding of what to deliver, such as Story Maps, Road Maps, Outlines, Design drawings etc. The Items on the Main Backlog may be specified using the User Story pattern.
• Tactical Backlog. In finely granular form, this shows each Team’s specific short-term work, progress, impediments and typically task allocation. It serves as the focus point for the Team during execution, but also as an information radiator to the rest of the organization, providing radical transparency.
• Improvement Backlog. This is an ordered list of improvements and impediments to the process and general working conditions, typically derived through retrospectives. The Operations Owner uses this as a tasklist. It also provides visibility of the Circle’s ideas and challenges for the rest of the organization, which then potentially can offer help..
• Relationship Manifest. This describes concretely how the Circle works together with other Circles (could be Suppliers and Customers) and the commitments they bestow on each other. Of course the commitments described in a Relationship Manifest must be within the range of the Circle Manifests.

Process Guidelines

The Circle can choose to work the Scrum way with its set of meetings and ceremonies, some may prefer Kanban or a combination of these two. A Circle may also choose a totally different way of working where appropriate. A Circle’s Process Guidelines must, however, comply with the fundamental Values and Principles shown above. 

At a minimum, a Circle’s Process must be radically transparent, accept and provide feedback, include people as volunteers and abstain from using fear and coercion under normal circumstances.

A Network of Circles

When combining Circles into an organization, a Network of Circles, the need for new communication and workflow relationships arise. There are a few recommended principles to follow. 

An organization must have consistent purpose, and it is good practice to have an Organizational Manifest documenting this and other high level principles: 

• Principles for delegation and prioritization
• Principles for escalation of tactical, strategic and operational matters
• Handling of crisis, transient teams and crews
• How internal accounting, employment, salaries and more are handled.

Network Circle architecture is best achieved in a collaborative process that often takes several iterations before the final design is agreed upon. It requires the involvement of everyone, not just senior managers. Everyone needs to be included by invitation. The following illustration helps explain the details:

The Value Stream

In the middle of the diagram, horizontally, is the Value Stream, with products and services flowing right to left to serve the Customers. It passes through a number of Circles – operational units – each adding their particular value to the stream. The ones within the organization itself are called the Primary Circles.

The Value Stream consists of the following Teams and segments displayed as Circles:

Customers

Customer Circles represent the organization’s understanding of those they serve, how they are logically grouped and organized. Manifests for the Circles describe who they are, their values and requirements and what they need.

Agile Customer Circles

Agile Customer Circles are the front line of the Primary Circles. They are designed and formed with the customer in mind; they have the skills and competences required to serve the customers needs in the best way possible. 

Ideally, the Customer should only have one entry to the organization, except where doing so creates too many internal delegations.

Ideally, the Agile Customer Circles should be able to do everything needed to satisfy the customers, however it is also desirable to keep teams small to maintain the dynamics. Sometimes it is better to get help from other Circles by delegating Backlog Items rather than expanding individual teams beyond their optimal size. It may also be helpful to scale a Circle up and have multiple Teams working off the same Main Backlog.

When starting to design the Network of Circles comprising the organization, it is good practice to start with one Agile Customer Circle on the inside of the organization matching each Customer Circle, and then iterate from there.

Circles in the center

Circles in the center or middle of the map serve other Circles in the organization. They perform services like marketing, admin, HR, legal support and build platforms or services common to multiple products. Their “customers” are internal to the organization. When external Suppliers are involved they may have Relations (dependencies or interactions) with them too.

Circles in the center also have Manifests, which describe “Why” they exist, “Who” they serve and “What” they do. It should include information about the Circle’s activities, artifacts and terms of delivery.

A special kind of Circle is sometimes used, they are called Traveller Circles. The people in such a Circle are mostly advisors, coaches or teachers of special skills. They coach and help out Primary Circles, occasionally taking on specific jobs.

When starting to design the Circles in the center it is advisable to start with one Center Circle called “Admin Services” or similar and iterate from there.

Suppliers

When strategic suppliers are involved in the Value Stream, it makes sense to include them in the Network of Circles and display them as a Circle as well. The Suppliers are described like any other Circle with a Manifest as well. The organization may not have complete control over the operating agreements in the Manifest for the suppliers, but can often negotiate acceptable conditions ensuring that the supplier is appropriately transparent with Circles that it has Relationships with.

Resolution Circles

Resolution Circles exist to coordinate interaction between Primary Circles and to deal with issues, conflicts and opportunities that are either unexpected or beyond the scope of individual Primary Circles. Circles and their modes of operation are designed to be optimal for the organization and relevant external conditions,  but the world sometimes behaves unexpectedly, making it necessary on occasions to go beyond that which can be handled at the Primary Circle level.

The operative term here is Escalation. Any Circle can Escalate an issue or idea deemed unresolvable in due time and have it resolved at this common (higher if you will) level in the Organization. When something is Escalated, it goes on the appropriate Circle’s Main Backlog and is dealt with according to that Circle’s rules of engagement (described on its Manifest). It follows that in large organizations it may be possible to escalate to several layers of Circles. It is good practice to have a defined Executive Committee to handle exceptions that require immediate action, it is often composed of the Guardian SO and OO of the highest level.

Resolution Circles can be of three different types as described below:

Tactical Resolution Circle

As the name suggests the Tactical Resolution Circle (TRC) is designed to resolve tactical issues which cannot be addressed by individual Circles or their bilateral negotiations. It is all about meeting the relative short term goals, such as Sprint Goals in Scrum (typically a few weeks). The TRC will typically involve an Operational Owner and team members representing the other teams. The TRC meets periodically to discuss pan-Circle issues such as dependencies, impediments and planning matters. This does not always have to be very often. In fact if bilateral negotiation is sufficient to meet goals acceptably, then

Strategic Resolution Circle

The Strategic Resolution Circle (SRC) is designed to resolve strategic issues, perhaps relating to customer  requirements, prioritization, product specifications, resource issues, or other business matters that cannot be addressed by other Circles and therefore need to be escalated.

The SRC also has strategic initiatives on its Main Backlog and typically a Strategic Roadmap to guide all the circles. Work may be delegated to other Circles.

The Strategic Resolution Circle is recommended to be composed of Strategy Owners (Product Owners) from the Primary Circles and includes one Operations Owner as well. One of the Strategy Owners may be designated as more senior with the power to break deadlocks – this person is called the “Guardian” Strategy Owner – effectively the SO of SOs.

This is not your ordinary hierarchy creeping back in. The SRC is composed of those people who live in the Primary Circles and have responsibility for these. However they do get together to address challenges together and choose courses of action for the common good, not just for their own Circle.

Operational Resolution Circle

The Operational Resolution Circle (ORC) is designed to resolve operational issues related to process, collaboration, team composition, impediments and improvements that for some cannot be resolved by the Primary Circles directly. Decisions are made with the interests of all the Primary Circles in mind and therefore may have a bearing on more than one Circle.

The ORC also has its own initiatives of organizational improvement on its Main Backlog. Work items may be delegated to other Circles.

The ORC is recommended to be composed of Operational Owners from the Primary Circles. As with the SRC, one of the participants typically has the authority to be the final arbiter, the Guardian Operations Owner so to speak.

Secondary Circles

In traditional hierarchical organizations, those with similar skills or competencies were grouped in the same departments, which gave some benefits. However, team-based organizations designed to work in the complex domain are cross-functional and instead of being focused on functional grouping, they concentrate on the Value Stream and the delivery of goods and services to customers.

The downside is the loss of focused work within an area of skill. The loss of comradery and sharing of ideas that sometimes come when people with similar interests and competencies get together.

The solution to this is the Secondary Circles (SC), where Team Members from Primary Circles meet from time to time to discuss cross-cutting concerns within their special area of skill and expertise. This is indicated in the figure above with the dashed purple line.

Examples of Secondary Circles could be QA and test people, designers, architects, communication or other subject matter specialists.

It is important to note that the people in Secondary Circles have their “home” in the Primary Circles, in the Value Stream. They are not pulled out of Value Stream, they do not constitute staff functions, they are always part of that primary focus on value. They may spend anything between an hour and a day per week on the Secondary Circle activities. They participate in all regular activities in their “Home” Primary Circle.

The work in an SC is also governed by a Manifest and a Main Backlog. Work may be delegated to an SC for example from the Strategic Resolution Circle. This could for example concern a strategic need to choose new common test equipment or a system, it is then delegated to the appropriate SC, since these are the experts in this field. People in an SC may take on a piece of work on the SC’s Main Backlog. It is good practice to delegate this back to the person’s “Home” Primary Circle, so that the work is visible on the Tactical Backlog there.

This concept of Secondary Circles is well known in many agile implementations and has been called Communities of Practice or Guilds. Sometimes these Circles start spontaneously because of a need in the Primary Circles and sometimes they are formalized because they provide valuable systemic input and work.

Transient Circles

Another important organizational  concept is the Transient Circle, which  is formed when extraordinary situations occur. This is indicated in the figure above with the dashed red line.

Organizations design their operating units and their Network of Circles to handle the majority of normally occurring situations. But there may be outliers for which the organization is not prepared. Dave Snowden calls these situations sudden drops into chaos, where any praxis will be completely novel.

The organization reacts to such a sudden drop into chaos by forming a so-called Transient Circle, this is typically composed of a few extremely experienced people. Their task is to stabilize the situation before it stabilizes itself, probably to the organization’s disadvantage. Sometimes organizations have a hunch that such a thing could happen, and have trained a “crew” that knows exactly what they are expected to do in this emergency. 

When the alarm bell sounds, a Transient Circle is quickly formed and springs into action . Normally a Transient Circle is given extraordinary authority to commandeer and conscript resources and people to participate in the stabilization, while the rest of the organization tries to keep ordinary life going as best they can. 

But this is a situation where we often suspend the normal rule of involving people through invitation, there is no time for niceties, “just put the fire out, then we will talk!”. The Organization trusts that the few very experienced people in the Transient Circle are able to make intuitive decisions based on their supreme experience for the common good, and that they have the character to really focus on the common good.

When the situation stabilizes, and the emergency work transitions into more normal operation, the Transient Circle is decommissioned. This is a very important aspect and should be marked clearly, otherwise there is a tendency that some undesirable power structures remain after such a drop into chaos.

It is often a good idea to then commission a Secondary Circle tasked with exploiting the knowledge gained through the operation of the Transient Circle. It could be to design ways of avoiding similar drops into chaos or turning the situation into an opportunity.

Relationships and more

Relationships and Delegations are important concepts in Agile Lean Leadership as they constitute the glue that binds the Circle together and the flow between Circles – primarily in the Value Stream.

Relationships

Circles can have Relationships with other Circles. When there is a relationship between Circles work (Backlog Items) can be delegated. Relationships can be uni- or bidirectional and have their own Manifests describing why the Relationship exists, what services are provided and what each Circle has agreed to, what to expect. This may be the case when organizations are bigger and deliveries are larger, requiring many skills and many people’s effort. It is sometimes more effective and efficient that one circle requests a delivery from another, with which it has a defined relationship.

Delegations

Delegation is the formal mechanism for exchanging deliveries. It is of course best to avoid handovers where possible, but sometimes this is the least of evils. The delegation must include a set of operating agreements, known to the parties and documented in the manifests. When a Circle needs another Circle to deliver something, a Backlog Item is delegated to that Circle. 

Borrowing resources is often the default mode in most organizations, but this ruins the benefit of Teams, to multiplex people between different teams. Delegation substitutes borrowing resources (manpower) because the latter wastes time on task switching and commonly creates confusion and causes mistakes. Operating agreements and delivery conditions for Delegations are documented in the Manifests.

It must be clear what to expect when delegating something. How does the delegatee prioritize and make everything visible? When accepting a Delegation the delegatee also accepts the responsibility to inform the delegator about any state changes. 

Many real life deliveries contain items that are Obvious, Complicated and some Complex, to use the Cynefin terminology. The primary candidates for delegation are the Obvious items, since they are the easiest to understand. Complicated Items can also be candidates, provided the delegator is convinced that the delegatee can find the necessary knowledge, but Complex items should not be delegated, they simply require too much interaction. It is precisely the strength of solving these items that rests with the small, self-organizing Team. 

Feedback

Involving the customer in the feedback loop is central to the idea of Lean Thinking and a means to achieve constant learning and improvement. It is good practice for Circles which delegate work to other Circles to provide disciplined feedback to each other to ensure that expectations are met within the agreed parameters. The feedback loop should operate continuously, but may take various forms including inter-personal meetings, interviews and other digital modes of communication.

Escalations

When a situation occurs that does not seem to lend itself to a solution within a Circle or through negotiations between Circles, it can be escalated to an appropriate Resolution CIrcle. Normally the organization has formulated some strategy in the Organizational Manifest for what  Circles should do before escalating.

Escalation means that the case is formulated and presented to the Escalation Circle, which then  convenes to try to find the best solution for all of the Circles involved. Often an escalated case will spawn a Backlog Item with the purpose of evaluating if the situation should result in some permanent improvement to avoid such cases in the future. Another possibility is that an escalation results in the formation of a Transient Circle, because the case at hand is too big to be handled immediately.

Everybody tends to think of the escalated cases as issues and impediments to be tackled, however other opportunities can be  escalated, because the Circle does not know how to exploit them best.

It is good practice that the Resolution Circles commit a certain response time to the rest of the organization, so that everybody knows what to expect. Such a Circle’s Backlog is also visible to the whole organization so transparency is provided.

Advanced topics

A Scaled up Circle

Sometimes a Circle has a need to deliver more than a small Team (5-9) can handle. We have already discussed the possibility of Scaling Out and delegating work to Circles further up-stream in the Value Stream. The Circle may conclude that it is more helpful to scale up the Circle in question, that is, have multiple Teams working on the same Main Backlog prioritized by one Strategy Owner.

• The Teams may have to be strengthened with skills to support the SO/PO more in developing requirements and liaising with stakeholders.
• There may be more than one Operations Owner. If there are more than 2-3 Teams, one person cannot be close enough to the Teams. They split the work between each other and self organize.
• Events are slightly different
  • Backlog Refinement is preferably done by all Teams together pulling in from the Main Backlog, alternatively Items are preallocated by a smaller group.
  • Sprint Planning #1 follows the same pattern.
  • Sprint Review consists of a quick common presentation, then a Turkish Bazaar style review with stakeholders visiting individual teams, that they take interest in who present their accomplishments in detail.
  • Retrospective consists of Teams doing individual Retrospectives and then aggregating a short Common Retrospective
• An in-circle tactical resolution meeting (Scrum of Scrums) may be created and meetings held between Team members if necessary.
• An in-circle operational resolution meeting may be created and meetings held by Scrum Masters if necessary.

A Scaled down Circle

A Scaled Down Circle is one with more than one input backlog. This typically happens when there are lots of smaller projects or work items from different sources or customers.

Sometimes Items on the Main backlog appear simply as delegations from other Circles. Sometimes there is a need for a separate backlog for each of the input streams, for example, if the different customers should not see each others’ items. This situation is common for Circles in the Center of the Value Stream.

• Prioritization between the different input streams is critical . Balancing the requirements of the different input streams is a major job for the Strategy Owner.
• Rules of engagement are very important; it follows that Scaled Down works better for smaller, more ordered work items (Clear/Obvious domain).
• Escalation is required when the rules of engagement create conflict or undesirable side effects.
• The Operations Owner often takes on following up externally. Team members tend to lose focus in this setup otherwise.
• Events may become different:
  • Backlog Refinement, Planning and Review sometimes have to be done by fewer members than the whole Team to preserve valuable work time.
  • Kanban is sometimes preferable to Scrum here, as it becomes hard to synchronize a Sprint across multiple external customers.

Modelling a large organization

The model for an Agile Lean Organization described here applies to approximately 10 Circles in the Value Stream and a few hundred people. When an organization is larger, another level needs to be added. We call these Super Circles, they are like divisions in an organization, each representing individual Value Streams. The principle is that there should be very little tactical interaction between the individual Super Circles. If there is interaction, one Super Circle appears as a supplier to another.

Nevertheless there is a need for coordination across Super Circles, allocation of financial resources, resolution of Cross Super Circle issues or cross-cutting concerns.

The normal praxis is therefore to have an extra level of Strategic and Operational Resolution Circles above the Super CIrcles and an extra level of Secondary Circles handling cross-cutting Organization wide concerns such as graphic profile or employment details.

Dual Leadership

The case has been argued that a Circle has two leadership roles, the Strategy Owner (looking out to the surrounding world) and the Operations Owner (looking into the internal functioning of the organization). This is equivalent to the Product Owner and Scrum Master in Scrum, or a Chief Executive Officer (CEO) and Chief Operations Officer (COO). This is not an entirely novel idea, research and practical experience have demonstrated the value of such an approach of complementary leadership:

• When there are two or more leadership roles, the risk of one person hoarding power is reduced. There is a built-in balancing act going on.
• Dealing with increasingly complex challenges becomes too much for one individual; few people span the gamut of the necessary competences and experiences.
• Both looking-out and looking-in require the full attention of a person.

According to Harvard Business Review there are four pillars that dual leadership rests upon: a common vision, common incentives, communication, and trust. 

There are many different ways of complementing each other than the one described here. In Agile Lean Leadership the simple rule of different focus areas is advocated: looking out and looking in, external customer value and internal effectiveness and resilience.

The Really big and wicked

Sometimes an organization faces decisions that affect everybody, or have huge commercial or personal consequences. Examples could be closure of a value stream, dismissal of people,  mergers or acquisitions. It is hard to come up with a definitive way of handling such decisions and many organizations are also constrained by law, or their own Articles of Incorporation or by-laws.

In principle the top Strategy and Operational Circles should agree on such decisions and the two “Guardians” will facilitate, and in case of deadlock, make a decision. A few other things to consider:

• Sometimes it is helpful to have an agreed arrangement with a third party to act as an arbitrator or mediator.
• Sometimes there are legal constraints on how to operate. A legal board may be in place, some shareholders may have special privileges that have to be accommodated (although this generally is a bad idea), or certain public governance rules apply.
• Sometimes there is an owner who in the end can pull rank.
• Sometimes the top resolution circles end up being combined into one. That of course can open the door to traditional hierarchy thinking.

It is also worth mentioning that some decisions and the process leading up to these cannot exist with full transparency as advocated. Mergers and acquisitions cannot be out in the public; the process leading up to the potential dismissal of people can also not be public.

Finally there are also constraints on organization from legislation, by-laws, contracts etc where authority has to be associated with individuals. There will be authority and responsibility for certain things; it cannot be a complete Utopia.

Templates, tools and practices

Agile Lean Leadership also recommends a host of Artifacts, templates, workgroup methods and other practical things that can be used to support the practices, principles and ultimately the values. They are not necessarily unique to ALL, but help a lot when implementing it. 

Some of the more important templates are:

• Vision Board or Lean Canvas
• Strategic Road Map for a circle or aggregated for the whole organization
• Story Map or Outline as an alternative two-dimensional representation of the Backlog
• Burndown and burnup display for goals, progress and impediments
• Templates for Circle and Relationship Manifests
• Templates for employment and compensation
• Templates for customers and supplier contracts
• Some good tools used:
• Future Backwards workshop method for achieving common understanding and input to backlogs
• Ritual Dissent workshop method for quickly improving specifications and narratives
• Open Space Technology for getting engagement and input to problem solution
• Estimation cards, like planning poker, confidence estimation Kano estimation of business value and complexity estimation

Some good practices used:

• Radical transparency, if people are supposed to be engaged and make intelligent and informed decisions they need to accept reality, that requires radical transparency
• Including people by invitation treating them as volunteers. Knowledge and learning cannot be conscripted
• Denouncing the use of fear, coercion and force as management instruments in normal situations
• Being willing to commit to and honor the commitments made in Manifests and direct interactions

All these practices and templates are supported by AgileLeanHouse’s productivity tool Agemba, learn more about it here https://agemba.com/#info 

Conclusion

Agile Lean Leadership is a set of relatively few and easy-to-understand values and principles coupled with an architecture starting point for an organization. This is backed up by a comprehensive educational course catalogue, coaching and the online productivity tool Agemba.

It is an immensely practical approach to establishing an organization on engaging and rewarding principles instead of using the old Hierarchical power model.