Agile Business Organization: You'll Know It When You See It


Advocates of agile development often say that "agile" doesn't mean "chaotic." Just because projects are small and change quickly doesn't mean there's no structure.


But, when you consider all of agile's implications, it's clear the structure it predicates, both for projects and for the business itself, looks very little like a traditional corporate org chart.


In "Management 3.0: Leading Agile Developers, Developing Agile Leaders," former CIO and leading agile advocate Jurgen Appelo lays out his vision of how a smart organization adapts to develop the right structure for its products and markets. Appelo's ideas are both evolutionary and revolutionary, and he backs them up with extensive citations of sources ranging from current efficiency researchers back to economics pillar Adam Smith.


An extensive excerpt of the book, dealing mainly with cross-team dynamics and leadership development, is available free to IT Business Edge members here in the IT Downloads library.


Appelo's basic concept of an agile organization is the same principle as agile development-break large projects down into small projects, and then scale out those small projects to be bigger as needs require. It's an incredibly disruptive notion; Appelo describes himself as an anarchist who is behaving peacefully.


The general notion is to break out specialized teams into various levels, but those levels don't fit into a tiered hierarchy. Each team has authority over their specialty, and other teams simply have to understand these roles and responsibilities as they move through projects. The diagram of a project team serviced by specialized teams, which you can see in the figure below, spells out the concept. Well, spells it out as well as you can hope for.



Appelo's term for the concept is "panarchy" (peaceful anarchy): a system of overlapping networks of collaboration and authority. He compares it to how individuals choose to accept authority contextually from various sources-the government, their bank, social media networks they belong to. Your landlord has no say in how many characters long your password on Facebook needs to be, and yet you somehow are able to juggle this concept of overlapping authorities and get on with life.


The path to this panarchy can't be the same for every organization, of course. Appelo compares corporate and team structure to biological evolution-the "right" answer is contingent on the pressures facing your business and the talent (DNA, if you will) present in your organization. Executives can't just completely check out of the process, of course. Appelo writes:

In complex systems, structure emerges by itself. However, as a manager, being responsible for the direction the self-organizing system takes, you can recognize that some structures are good and others are bad. The level of steering and intervention needed depends on the maturity and competence of the people in your teams.

It's obviously a balancing act.


Key suggestions Appelo makes as he walks through his management philosophy include:


  • Embrace specialization, despite the tendency to believe that a team of generalists can be more "agile" in handling multiple projects and closer contact with line of business managers. Adam Smith had it right, after all.
  • As a nod to flexibility, he argues that broad job titles like "Software Engineer" allow you to change team members' daily job functions without the hassle or politics of changing their titles.
  • It's best to let the team itself decide on who leads on a specific project or process. He refers to this as informal leadership, and he says it's just best to let it emerge. Very evolutionary.


The 81-page excerpt is an engaging read. It won't tell you exactly what to do, but that's really the point.

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