Version 1.1 – 2020-07-15
Agile Lean Leadership is a set of values, principles and practices that help organizations get started on their journey towards resilience and sustainability. This whitepaper gives a high level view of it all. PDF version
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.
During the Industrial Age, much leadership was about getting people to “do” what was already planned by their superiors. 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.
See Dave Snowden’s Cynefin model opposite, which places work in four domains depending on what knowledge is available and hence how clearly outcomes can be predicted.
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 Lean thinking, Agile and organizational behavior, with input from the founders of Agile Lean Leadership. We are especially indebted to Scrum and its Sprints, Roles, Events and Artifacts. However, we are particularly concerned with expanding the concept of the team to the organizational level in an easy to understand way. We call this scaling out in the organization.
The result of introducing the Agile Lean Leadership concept is the 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 commitments.
We want an organization that
- Delivers real value fast and frequently; learns quickly and adapts rapidly and inexpensively when needed
- Has a consistency of purpose, is focused on the long term and is sustainable
- Is reliable and resilient, keeps promises and commitments, has high quality standards in all aspects and is able to react quickly and sensibly to the unexpected
- Is innovative, has motivated, energetic and fulfilled employees who can explore, experiment, learn and find solutions to complex challenges
- Balances empathy with its focus on customers, employees, other stakeholders and society at large, while allowing people to be involved by choice
A set of core values has been formulated. 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.
To support the values there is a set of 16 principles that people in the organization can refer to when making decisions. 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, 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 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 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.
- 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, 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.
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, 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
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.
Agile Lean Leadership basic Patterns
A number of basic patterns 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: CO (Product Owner), XO (Scrum Master) and Team consisting of Team Members.
- Circles have Process Guidelines, an agreed ceremony or 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, a combination of Scrum and Kanban or some other Agile Lean pattern.
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.
- The Commanding Officer (CO, like a CEO) is equivalent to the Product Owner in Scrum, looking out at the value generation, towards customers, competitors and society at large.
- The Executive Officer (XO, 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 XO’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.
- 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 and will be modified from time to time as circumstances change.
- Main Backlog. This is at minimum an ordered list of deliverables for the Circle, it is equivalent to the Product Backlog in Scrum. It is the job of the CO (Product Owner) to prioritize the work on the Backlog 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.
- Team Backlog (or the Tactical Backlog). In 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 XO (Scrum Master) uses this as a tasklist, it also provides visibility of the Circle’s ideas and challenges for the rest of the organization.
- 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.
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 patterns. 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.
The Organization – A Network of Teams
When combining Circles into an organization, new patterns in the network of Circles arise and a few of those are recommended patterns 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
- Internal accounting etc.
Circle architecture is a collaborative process that often takes several iterations before the final design is agreed. It requires the involvement of everybody, not just senior managers. Everybody needs to be included by invitation. The following illustration helps to explain the details:
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. These are called the Primary Circles, there are several types of these:
Customer Circles represent the organization’s understanding of those they serve, how are they logically grouped and organized. Manifests for the Circles describe who they are, their values and requirements and what they need.
Peripheral Circles are designed and formed with the customer in mind, they have the skills and competences required to best serve customer needs.
Ideally, the Customer should only have one entry to the Organization, except where doing so creates too many internal delegations.
Ideally they 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 Teams by delegating deliverables 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.
Center Circles serve other Circles in the organization (typically in the Periphery). 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.
Center Circles 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 case of Center Circles are sometimes used, they are called Traveller Circles. The people in such a Circle are mostly advisors, coaches or teachers of special skills. They visit proper primary Teams in the value Stream and help out the Team Members, occasionally they take on specific jobs (Backlog Items), in which case they Delegate the job back to the Traveller Circle, where they solve it.
When starting to design the Circles it is advisable to start with one Center Circle called “Admin Services” or similar and iterate from there.
When strategic suppliers are involved in the Value Stream, it makes sense to include them in the Organizational Relationship Map. The Supplier Circle is described like any other Circle with its Manifest. The Organization may not have complete control over the operating agreements in the Manifest for the Supplier Circle, but can often negotiate acceptable conditions ensuring that the Supplier is appropriately transparent with Circles that it has Relationships with.
Level 2 Circles – and beyond
Level 2 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 and their bilateral negotiations. 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 the higher level in the Organization. When Something is Escalated it goes on the appropriate Level Circle’s backlog and is dealt with according to that Level Circle’s rules of engagement (described on its Manifest). It follows that in large organizations there will be a Level 3 (or higher) set 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 CO and XO of the highest level.
Higher Level 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 XO 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 every day. In fact if bilateral negotiation is sufficient to meet goals acceptably, then instituting a TRC is not recommended. In classic Scrum, this is informally known as the Scrum of Scrums.
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 SRC is composed of COs (Product Owners) from the Circles one Level lower and includes an XO. One of the COs may be designated as more senior with the power to break deadlocks – this person is called the Guardian CO – effectively the CO of COs.
Operational Resolution Circle
The Operational Resolution Circle (ORC) is designed to resolve operational issues related to process, collaboration, team composition, impediments and improvements that cannot be resolved at the Team level below. Decisions are made from a level-wide perspective so may have a bearing on more than one Circle.
The ORC also has its own initiatives of organizational improvement. Work may be delegated to other Circles.
The ORC is composed of XOs (Scrum Masters) from the Circles one Level lower. As with the SRC, one of the participants typically has the authority to be the final arbiter – this person is called the Guardian XO – effectively the CO of XOs.
In traditional hierarchical organizations those with similar skills or competencies were grouped in the same departments. However, Team-based organizations designed to work in the Complex Domain are cross-functional and instead of being focused on functional grouping, concentrate on the Value Stream and the delivery of goods and services to customers.
The downside is the focused work within a skillset, loss of comradery and the sharing of ideas that sometimes come when people with similar interests and competencies get together.
The solution is 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 green line.
It is important 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 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” 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 Level 2 Strategic Resolution CIrcle; it could be that there is a strategic need to choose a new common test equipment or 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 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 (COP) 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.
Organizations design their operating units to handle the majority of normally occurring situations, but there are outliers, situations that you could imagine, but not really be ready for. Dave Snowden calls these situations sudden drops into chaos, where any praxis will be completely novel.
Transient Circles are typically composed of a few extremely experienced people. Their task is to stabilize the Chaos 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.
If a “crew” or Transient Team exists or is commissioned by the appropriate Level CIrcles, or ultimately by the Executive Committee, it must spring into action when the alarm bell sounds. Normally a Transient Team is given extraordinary authority to commandeer and conscript resources and people to participate in the stabilization, the rest of the organization tries to keep ordinary life going as best they can.
When the situation stabilizes, and the emergency work transitions into more normal operation, the Transient Circle is decommissioned. 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 Delegations
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.
CIrcles can have Relationships with other Circles. Relationships can be uni- or bidirectional and have their own Manifests describing why the Relationship exists and what services are provided. Obviously what is on this Manifest has to be a subset of what the supplying Circle is capable of providing. The manifest creates transparency and clarity in the organization.
When a relationship exists between Circles, work (Backlog Items) can be delegated between Circles.
A goal of all Agile principles is to avoid handovers, as they create delays and ambiguity. However there are situations where the total avoidance becomes impractical or too inefficient. This may be the case when organizations are bigger and deliveries are larger, requiring many skills and many people’s effort. It is sometimes better that one circle requests a delivery from another, with which it has a defined relationship.
Delegation is the formal mechanism for exchanging deliveries. It must include a set of operating agreements (Rules of engagement), 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 Team approach making, people feel multiplexed. Delegation substitutes borrowing resources (manpower) because the latter 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. It is precisely the strength of solving these items that rests with the small, self organizing Team.
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.
- 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 online tool Agemba read more about it here https://agemba.com/#info
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 program, consultancy and an online tool.
It is an immensely practical approach to establishing an organization on engaging and rewarding principles instead of using the old Hierarchical power model.