Flat organizations tend to be more skilled and more able to foster innovation

But flat Organizations rely heavily on srong self-motivated and self-regulating individuals – basically a primadonna culture.

If an organization has one level – i.e. it has a flat organizational model, individuals use capability to distinguish themselves. They become more adept at focusing on developing their skills and advertising their capabilities, giving them (at least the successful ones) more clear stature in the company and industry. For companies that require innovation and the circulation of new ideas in their product development operations, this enhances their competitiveness in the market. Additionally, since one’s prestige and stature in the organization becomes driven by their skills, capabilities, and the advertisement of this both internally and externally; these organizations tend to be able to recruit considerable top-notch talent.

Equally, flat organizations are harder to oversee and more complex to maneuver through. They require a broader approach to management as well as a lighter touch so as to not stifle creativity. In a flat organization, the only way to keep a control on direction and activity is through mutual respect and alignment to a common vision. Otherwise, pockets will develop that may have fascinating results, but dissipated strength and local optima will develop. If these are neither harvested nor eliminated, precious resources will be spent without furthering achievement towards the organizational objective. In a research based organization, this is ideal as it allows the individuals (or teams) to explore venues through to their natural conclusion. DEKA’s production of the Segway is a great example of this

Management in a flat organization needs to be done with thorough peer review and mentorship. Everyone, regardless of their seniority should either choose or be assigned a mentor. As individuals gain capability, they may choose their way through continuous learning with different masters – stay with each mentor long enough to gain what they feel as their appropriate level of awareness in a field. As people excel in one direction or another, it is the role of the mentor to encourage the individual to stay with the discipline and continue their journey. Frequently, people will make poor decisions in other’s eyes, but as soon as fences are constructed, hypocrisy becomes established.

Hierarchical organizations are recursive and lead to command and control behaviors

This is certainly not my first choice for a transforming agile company.

In a hierarchical organization, small groups tend to be calved off the larger organization until there is an entire tree structure of pods of people with like backgrounds and objectives. Modern management theory suggests that one person can adequately control/manage no more than 10 individuals, so for larger organizations, trees are built such that each has about 10 people and an manager, who is themselves an individual in someone else’s group.

These pods are typically like talents because the approach to management has evolved to be a high touch interface where the manager has frequent interaction with the direct reports or both status and planning of both their activities and their growth (we must note that growth usually takes a back seat unless the individuals do it on their own. Given the high touch, it is equally unrealistic for the organization to assume that the individual will participate much in actual work. Granted this, we tend to note about a 25% drop in productivity for every level of hierarchy that a manager has to manage – A first line manager will have a maximum throughput of 75%, second line: 56%, and so on. After this, it is really silly to expect that a manager will really be able to be productive at anything other than management or control.

Based upon this, it is clear that the flatter the organization and the stronger your self organization and management capability is the more productive you will be as an organization. When you couple the fact that managers tend to make more than their staff, and 3rd line and above do not do productive work, becomes clear that you lose economical edge to the flatter org as well.

Organizational Changes: from Command for Control to Agile

Most organizations tend to adopt a standard hierarchical organization structure. This is one where there is a CEO who has an executive leadership team reporting to him, each individual on that team themselves have a duplicate of this structure for their teams and so on down to the bottom. In addition, there is typically another set of structures for project within programs within product lines, all recursively reflecting the structure. Regardless of the goals and the objectives of the organizations, or the products that they build, the goal of most individuals in these organizational pyramids is to rise to the top so that they can jump off into the next level. Imagine, if you will, any large organization being an inverse Mario Brothers dungeon – with perils increasing as you jump up, from level to level rather than the reverse (but the same theme music blaring in your ears as you run!).

People in the organization are subsumed by this goal – that of reaching the pinnacle, assuming that the princess is there somewhere – rather than achieving the goal of product or project release. Basically, their goals and the corporation’s goals are not aligned. Those that have wanted to innovate or create or even release have left to go other places where it is easier. Those who are interested in accession have remained. I find it mildly humorous the number of principals in the organization who will state that their desire is to become a manager, even though they dislike dealing with people and would prefer to contribute more “wholesomely”.

Clearly, an alternative is to eliminate the prize at the top of the pyramid. That is hard, because America and its capitalism is all about the rewards of the powerful. But, once we acknowledge that this is what we are all about, we can basically help people find power in niches in which they both excel and that align with the overt goals of the organization. Reward people for contributing rather than only managing. Create an organization where power is represented through disciplinary leaders rather than controlling directors.

OK, so let’s recognize the differences between organizational structure options and then define a hybrid that works here.

Where to go next

The objective would be to eliminate the friction between the organizational layers so as to remove as many of the pebbles as possible. The two changes I would make first and foremost would be aligning the organization reporting structure to the agile values of the division with the elimination of the command and control hierarchy that we currently rely on and second the establishment of an agile portfolio management structure to emphasize the concepts of transparency and eliminate the perceived need for the current task forces with their attempt to “drive” projects to completion by the perennial death marches.

Post Sisyphus

Another analogy worth thinking about here is that of a rock (a really large one) rolling down hill. If that rock is our agile transformation, its momentum is what we are most interested in. At the beginning, it was standing still, stuck in the dirt on the top of the hill. It took a considerable force to get it unstuck and moving (in the right direction); however, once it was, common wisdom suggests that it is not easily stopped. Unfortunately, the reality of the situation is that it actually takes fairly little to derail the change. Imagine, as our rock is rolling down, picking up more and more speed (and therefore momentum), it hits a little pebble. Depending upon the momentum we have at the time, the three possibilities are:

1. Our rock stops, lodged on the pebble
2. We roll right over it as if it was not there
   
3. We hit the pebble and go bounding off course
   

What happens in each individual case is completely dependent upon the momentum the transformation has achieved at the time hit hits the bump – too little and we stop altogether; more than enough (the process is well institutionalized) and we pay no notice to it; everywhere in between and the unpredictable (and unpleasant) happens.

Most organizations undertake transformation as result of unacceptable performance. Rarely can you justify perturbing a machine that is adequately delivering ‘stuff’, so it follows that for anyone undertaking a transformation there are enough issues that arise so that their rocks appear to be rolling through a bed of gravel. My strenuous recommendation at this point is to first push for organizational alignment between the layers as that tends to reduce or eliminate most of the immediate irritants and will allow us to purge the resentment and re-establish trust from individuals and create teams. From there, regaining momentum on the transformation will be much simpler and indeed internalization of the agile methods at both the operational and the organizational levels will dramatically increase throughput of the teams and collaboration between the teams in all of your ‘current flows’

Phase and Harmony

In most organizations, the teams themselves are functioning relatively well as agile entities. They have the overall concepts and practices understood and internalized. Every iteration, they go through a number of motions following the patterns they have been taught. Unfortunately, they also carry a degree of cynicism that permeates their activities, some more than others. Mostly, this cynicism rises from the desire to bring about changes we (the individuals on the teams) feel need to happen in order to optimize our efforts. I have seen indication that attempts had been made initially but since the desired actions were felt to be outside of the individual spheres of influence, the they have given up trying to achieve the change and, worse yet, believing that the organization’s desire for change is only lip-service.

Basically, the teams have tentatively pushed out of their flow and into that of the enterprise above them and some of those irritating turbulent eddies have formed. There seems to be little attempt to understand the irritants in the next higher flow and so a defeatism has developed and fostered the cynicism. The result here is that the teams go through the motions with the agile approach, but no one is really embracing it as a way of doing work. Evidence of this is the total disinterest in improving their execution of the art, the value of transparency and the unwillingness to seek goal alignment between products and organization. Instead a resentment has been born between one group and the next as well between one layer and the next. From this dysfunction, mistrust becomes more and more entrenched and it becomes impossible to reach phase and harmony, forcing the teams to always operate well below their potential.

To add to this, the resentment tends to be redirected towards the change undertaken and redirected towards agile methods themselves. Since titles and responsibilities tend to be changed without specific care given to the roles themselves, middle management feels as if much of their power and ability to affect direction has been lost. Rather than retrenching and establishing leadership from mutual respect, most of the folks again tend to rely on position and title to direct the actions of their teams and people. Clearly a left over command and control trait, but it is one that seems to be more well respected by senior management (the next flow up) than the collaborative structures that we try to base the methodology on.

Your Agile transformation is stuck

An associate of mine also in the transformation field noted that agile transformations are extremely fragile. Truth be told, all transformations are fragile, but agile ones appear more so because we celebrate collaboration and transparency and so everyone’s contribution becomes more obvious and the collective’s progress more clearly visible – or not.

Any transformation relies on establishing sufficient momentum under the new processes so that the level of effort needed by the teams to keep them moving becomes minimal and sustainable. Once organizations get over the initial hump of learning, they should become fueled by the benefits: energy put in to use the new approach is dwarfed by the value received from using it. At least this is what we hope and expect will happen.

Occasionally, the change agent gets it all wrong and the local culture will not sustain the new methodology. More frequently the methodology used at one level of the organization is enough out of phase with the governance of the organization and the resulting discord does not allow the new methodology to ‘adhere’. A good analogy here are the stratified layers in any moving currents, such as layers of water or air. Wholly within the current the flow is smooth, but where the layers touch, there is a fair amount of turbulence. Indeed, experimenting with water or air where the different currents are colored shows that whenever a random stray from one flow gets ’loose,’ eddies form infectious pockets of turbulence that swell, fester, and eventually dissipate – but only after the currents in that area are well disturbed.