From Hierarchy to a Network of Teams

Author: KURT NIELSEN

Agile Lean Leadership is a framework for creating a sustainable and resilient networked organization as an alternative to the classic, top-down hierarchy.
It creates an environment for quick adaptation to changing circumstances. It is based on de-central decision-making in teams populated by engaged, competent individuals.
It unleashes those resources and that potential in the people in the organization, which the classic hierarchical organization typically inhibits.
It has provisions for serving the customers, resolution of challenges, escalation, and handling of crosscutting concerns.

Agile Lean Leadership (ALL) is a way of organizing work and decision-making that differs from the classic hierarchical, top-down way. It deals with the fundamental questions in an organization:

• What is the purpose of what we do?
• What are the values we are committed to?
• What are the structures and processes that can be relied on?
• What or who determines what I should do in different situations?

In the classic power-based hierarchy the answer is simple: The boss will tell you. There are varying degrees of concentration of power from the single imperial CEO to a leadership team of ruling executives. There are also varying degrees of commitment to a form of overarching organizational principles, similar to the constitution in a country. They are often called the “Articles of Association” with accompanying “Bylaws”, which are intended to give direction and curb abuses of power but can often be changed at the drop of a hat.

The ALL answer is a more comprehensive set of transparent agreements and commitments called “Manifests,” which are tied together by the same articles and bylaws mentioned above. They are agreed upon and committed to by the people working in the organization, often through proxies representing a larger group. The idea is that free agents agree on what is in everyone’s best interest. At the team level, ALL is based on the well-known Scrum framework. The principles are:

• No one is entitled to special privileges or can be allowed to abuse others.
• No one should not use force against others — all interactions should be voluntary.
• Everybody should honor the commitments they make to others.

In that respect, an ALL organization seeks to implement an environment that enables engagement, a certain autonomy, influence on decisions, and pride in work.

ALL resembles a democratic approach to the rule of law seen in society, as opposed to a monarchical or oligarchical approach. Like all structures involving many people, it requires constant engagement to keep functioning and not slip back into the easier totalitarianism with consequent loss of freedom.

A Framework for the Modern Complex World

One reason for considering the ALL framework is the improved understanding of the different cognitive domains in which we operate. The Cynefin model is useful in this respect.

Most leadership “recipes” are based on examples of people who did well in crisis management (The Chaos domain) using an imperial leadership style. This is a mistake as completely chaotic circumstances are rare; opening the door for an imperial figure can go terribly wrong.

The traditional hierarchical, top-down, power, and rank-based system may function in the Clear/Obvious domain and perhaps the Complicated domain, as it primarily ensures compliance and predictability. But it certainly does not do well in the Complex domain, where maneuverability and resilience are called for.

In complex situations we only have fragmented knowledge and are highly susceptible to noise and cognitive biases; we need radical transparency to work with experiments and knowledge building.

This requires the perspective, engagement, and creativity of all involved parties. It requires respect, psychological safety, and input from everyone; which is not usually the case in a power and fear-based system.

We create organizational coherence through common values and goals, not rules and regulations.

The Failure of the Classic Hierarchy

It is remarkable that we often in society in our part of the world try to avoid the single autocratic political leader or oligarchies, but in organizations and businesses, we – influenced by the media – seem to revere and promote them in awe. However, the focus on always ranking people in hierarchies and concentrating power in a special upper class has dire consequences for the effectiveness of organizations:

• The attractiveness of a higher position overrides intrinsic motivation.
• In the hierarchy, you do not have colleagues, only competitors for power, which changes people’s personalities for the worse.
• This effectively prevents teamwork and rapid dissipation of information.
• Fear easily becomes the prime instrument of management.
  

  

• The separation of thinking and doing, where the few at the top make the plans and the rest execute typically fails. Big upfront planning doesn’t work for complex challenges.
• The Danish public sector is living proof of this (New Public Management).
• The traditional command hierarchy is way too slow in reacting to sudden phase shifts in markets or technology. An example is the Chinese reaction to the Coronavirus.
• People are fed up with being patronized by a few or “a system” they do not understand, so the best of them leave, voting with their feet as Eastern Europeans before 1999.

“If your boss is the customer, who takes care of the real customer?” – W. Edwards Deming

“You either move up or you move out!” – General Stanley McChrystal.

What is called for is this new, yet old (it is based on Lean Thinking) framework: Agile Lean Leadership.

If the boss doesn’t tell us what to do, who does?

In the traditional hierarchical organization the ruling class at the top issues and changes the rules when they want. This is how it was in Tsarist Russia, as a citizen you had rights and property as long as the Tsar said you had.

How could this be otherwise? We seem to drag with us a heritage from feudal times when the bulk of the population was illiterate, thinking that it has to be this way; a superior will do the thinking for us and tell us what to do.

On the contrary, ALL promotes the following set of guidelines for reaching decisions based on a solid foundation of the organization’s laws:

It starts with respect for each individual and recognition of his or her intrinsic value.

Operating units in the organization are formed as small, self-organizing, cross-functional collections of people capable of fulfilling their defined mission and supplying their deliverables. We call them Primary Circles.

Any challenge, disagreement, or conflict between people or Circles is first sought to be resolved through bilateral conversation, then mediation through the Operations Owner (Scrum Master), and finally through escalation to a Resolution Circle

Each primary circle has a Team with the skills to deliver; a Strategy Owner (product Owner) able to understand and prioritize the delivery of value and an Operations Owner (Scrum Master) with a focus on process and removing impediments.

Primary Circles can form a Value Stream from supplier to customer, where each circle contributes a certain value to the final delivery. Circles delegate work to each other.

In order to tackle cross-circle issues, decisions, disagreements, and new challenges, a set of Resolution Circles are formed for the Tactical, Strategic, and Operational areas. These circles comprise representatives from the Primary Circles. It facilitates representative decision-making, a bit similar to the old Nordic “thing”, where free men met and decided on matters of common interest.

Sometimes there are matters of cross-cutting concerns, such as design, quality assurance, or communication, where people in several primary circles have qualifications and interests. A Secondary Circle can then be formed to deal with these matters; these are sometimes referred to as Guilds or communities of interest.

Finally, organizations may experience a sudden drop into chaos, sometimes good but mostly bad. A quick reaction is called for in order to stabilize the situation. A good practice is to form a Transient Circle which draws the most qualified people from the Primary Circles. They will seek to stabilize the situation, disband and revert to normal.

“In an operating bureaucracy, strategy gets set at the top. Power trickles down. Big leaders appoint little leaders. Individuals compete for promotion. Compensation correlates with rank. Tasks are assigned. Managers assess performance. Rules tightly circumscribe discretion.” All of this gradually takes its toll on economic productivity and organizational resilience. – Gary Hamel

The decisions made bilaterally, through mediation, or through Resolution Circles are reflected in publicly visible, Manifests:

• Each Circle has a self-authored Manifest that declares who they are, what they do here, how to work with them etc.
• Each inter-circle relationship is negotiated bilaterally and has a Manifest describing how they work together and their rules of engagement.
• Each delegation of work carries an instance of the process described in the Manifest of the Relationship.

Why not a single leader?

In ALL we promote the idea of distributed leadership and mandate inherited from Scrum:

• The Strategy Owner (Product Owner in Scrum) is responsible for strategy – looking out for the stakeholders and for the generation of value and return on investment.
• The Operations Owner (Scrum Master in Scrum) is responsible for collaboration, learning, and constant improvement, looking after the circle’s needs.
• The Team is responsible for tactics, and how to deliver valuable products and services to the customers. The Team has all qualifications to accomplish this.

There are several reasons for this:

• When working with complex matters, the challenges of all the aspects of work are huge and best served by two individuals with the appropriate profiles instead of a single person trying to multiplex. It is rare that people can span this gamut effectively.
• It creates a set of checks and balances, where the power of the individual is limited and held in check by others. The chance of a leader developing into a despot is thus reduced.
• It dampens the negative aspects that can develop when people are elevated to superiority, such as feelings of special entitlement to privileges, contempt for others, loss of contact with reality, and flashes of incompetence.

Will Agile Lean Leadership Always Work?

Many people are so used to the hierarchy that they cannot fathom the idea that something involving decentralized authority can possibly work. Of course, there are pre-conditions to what we could call “Engaged Self-Management”:

• Everybody has to have a fundamental respect for others and abstain from seeking privileges at the cost of others
• It can develop and work when people are mature, articulate, willing to engage in interpersonal collaboration, and committed to the values and vision of the organization.
• It rests on the belief that people are naturally going to work together and form teams.
• It rests on another belief that people are willing to accept decisions made by their representatives in various forums.

On the other hand, it will not work if:

• Current management tries to push this on people and command them to behave this way. People have to be invited and given the opportunity to join.
• People lack initiative, they are bullies or power mongers or just like to exercise command authority and push others around.
• The culture in the organization lacks trust, people are codependent and lack social intelligence or the organization is swamped in bitter, back-biting politics.

But given the preconditions are there, let us follow the advice from two unlikely sources, the US Navy and the US Military:

“We push authority as far out as we can find someone who can carry it.” – Captain David Marquet

“We move the decision power to where the information is, not the other way around!” – General Stanley McChrystal

As long as we stick with the classic hierarchy as the way of dispersing power and privileges, we will keep getting the same results of disengagement and unhealthy competition.

 

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