August 2018 Archives

This is the seventh article in the series of seeing system dynamics in organizational change. In the last article, we concluded that incremental structural change was more appropriate for huge organizations. In this article, we shall look at the different approaches for incremental structural change.

Two approaches

There are mainly two different approaches for incremental structural change. For the ease of explaining, I shall refer to the LeSS terms, but the thinking behind goes beyond LeSS and applies to the incremental structural change in general. 

Seeing system dynamics in organizational change - 7.1.jpg

The above diagram illustrates these two approaches for a typical telecom product. The product consists of 3 main subsystems - O&M (Operations & Maintenance), CP (Control Plane) and UP (User Plane). In each subsystem, there are several components. Before we start the change, all teams are organized around components and functions. The change vision is that all teams will be cross-functional and cross-component, i.e. all are feature teams. How are we going to make incremental structural change?

  1. Gradual expanding

This is the approach used with LeSS guide: feature team adoption map. We first expand the scope of component team and move it closer to feature team. For each subsystem, we make structural change to create "feature" teams inside subsystem. The expansion happens in parallel in all subsystems.

  1. Cutting through

This is the approach used with LeSS guide: one requirement area at a time. We cut through all subsystems and create the first requirement area, with a few real feature teams. In the meantime, the major part of the organization remains with the old structure.

There are similarities and differences between these two approaches.

What's the same

Both are incremental structural change. Thus, both are only the first step towards the change vision. As described in the last article of "the scope of structural change", we limit the change scope to decrease the complexity, but it extends the change period, which increases the complexity. Therefore, it is a balance.

There are a couple of challenges for incremental structural change.

  1. The initial success is critical, as there involves a reinforcing loop. 

Seeing system dynamics in organizational change - 7.2.jpg

R1-loop: Result speaks

Better result, more commitment, more investment, leading to even better result. Note that it works in other direction too. Worse result, less commitment, less investment, leading to even worse result.

This is probably the most fundamental dynamic for any change. We must have the initial success and let the result speak. This applies to both approaches.

2. The change may stall after the initial success, as described in the article of "from change resistance to limits to growth". In order to grow the change, we have to set the next goal immediately after the initial success, until the change vision about organizational structure is fully achieved.

What's different

In order to have the initial success, these two approaches make different trade-offs, as summarized in the below table.

Seeing system dynamics in organizational change - 7.3.jpg

Let's elaborate in more details.

  1. Organization

We would only have real feature teams with the second approach. The change there is more disruptive, as it cuts through the whole organization. However, it does not affect everybody immediately, instead, the initial change is based on volunteering.

The second approach also leads to parallel organizations, in which one requirement area works in the new mode, while the rest of the organization remains in the old mode. This increases the complexity for change management.

  1. Customer value

Individual teams in the second approach would deliver real customer value in every sprint, while inside-subsystem "feature" teams still need to coordinate and integrate their work together for customer value delivery. In essence, inside-subsystem "feature" teams are still component teams, thus, they suffer from the same problems as component team, but to a lesser extent.

  1. Learning

Learning from a component to a subsystem is more gradual in the first approach, while broad learning is usually required immediately in the second approach. The broad learning could mean a big challenge if team members have narrowly focused on small components in the past.

 

In summary, both approaches are incremental, thus share the same basic reasoning and dynamic. However, they make different trade-offs for the initial success, thus take different first step.

 

This is the sixth article in the series of seeing system dynamics in organizational change. We shall examine the topic of structural change in this and next articles. We first look at the scope of structural change - how big structural change is appropriate, and what factors and dynamics are involved in the choice.

Structure is a first-order factor

I have referred to Richard Hackman's work on how structure and coaching jointly affect team performance in various articles, e.g. Team-first or Organization-first, Huawei - LeSS without Scrum. I do not repeat his diagram here, but present it as a "limits to growth" dynamic.

Seeing system dynamics in organizational change - 6.1.jpg 

R1-loop: Coaching for performance

We improve the coaching effectiveness, which improves organizational performance. Then, we further improve coaching. We expect to create a virtuous cycle.

B1-loop: Structure limits performance

The current structure becomes a limit, as it is inconsistent with the goal. Once the organizational performance is high, the structural change is small. This keeps the structural consistency low, which eventually limits the growth of the organizational performance.

The leverage in "limits to growth" system dynamic is to break the balancing loop, preferably in early time. This means to work on the structural change from early on.

Then, how big structural change is appropriate?

The scope of structural change

Let's first understand the scope of structural change and look at it as a continuum.

Seeing system dynamics in organizational change - 6.2.jpg

  1. No structural change. In traditional project setting, the group is formed virtually and temporarily. There is essentially no structural change.
  2. Structural change for one team. This one team is formed permanently, and the reporting line is changed accordingly; while the other teams remain in the old structure. There exist parallel organizations - one part in old structure and the other part in new structure.
  3. Structural change for all teams. All teams are formed at once, and the whole organization is in new structure.

Seeing system dynamics in organizational change - 6.3.jpg

Once the organization is huge, consisting of many teams in many areas, we may take intermediate step and change the structure for multiple teams - more than one team but fewer than all teams. This could mean structural change for (3a) all teams in one area, or (3b) one team in all areas. We could still change all teams in all areas at once, as shown in (4).

In summary, we could define the scope of structural change as a variable, from (1) smallest to (4) biggest.

  1. No structural change
  2. Structural change for one team
  3. Structural change for multiple teams
  4. Structural change for all teams

Structural consistency vs. stability

Suppose that the current structure is not consistent with our change goal, we need to increase the consistency in order to succeed the change. 

Seeing system dynamics in organizational change - 6.4.jpg

B1-loop: Structural change for consistency

As structure limits organizational performance, we make more structural change, which brings the structure more consistent with the goal. As a result, the organizational performance improves.

B2-loop: Structural change breaks stability

The more structural change, the less structural stability, the more resistance to reduce the structural change.

This is particularly true when the structural change involves the dissolution of existing roles. It poses a threat to the psychological safety. This is why it is so important to ensure job safety but not role safety, as described in the article of "job safety but not role safety".

The structural consistency is the system goal here, while the structural stability is the secondary concern. We make structural change to optimize for the consistency, while address the stability concern in other ways.

Structural change scope vs. period

The scope of structural change affects change period too, i.e. how long the whole change will take. Think about a 20-team organization. If you make structural change for one team at a time, the scope of each change is small; but the change period is long. If you make structural change for all teams at once, the scope is big; but the period is short.

Seeing system dynamics in organizational change - 6.5.jpg

B3-loop: Small change scope to reduce risk

When we perceive the high change risk, our anxiety increases. This leads us to make smaller structural change. Smaller change scope is less complex, thus, its risk becomes lower.

R2-loop: The complexity from long change period

While making smaller structural change, the change period becomes longer. The long change period increases the complexity, thus, its risk becomes higher.

Why does the long change period bring in the additional complexity? A couple of main reasons:

  1. It requires strong discipline of the organization to get through the long change period, without losing the focus. There will be more crises in the longer period, which triggers our short-term thinking to shift the burden, as described in the article of "from survival need to shifting the burden".
  2. The parallel organizations are challenging to work with, as different parts of the organization are not consistent with each other, which easily causes confusion. The longer it is kept as parallel organizations, the more pains it has to go through.

Of course, the complexity from the change scope is also valid. It is indeed more risky to change a bigger part of the organization at one time. We need to balance between change scope and change period.

LeSS does not suggest to start from one-team change, but make the structural change at once for 2-"8" teams. However, LeSS Huge suggests to take incremental approach for "8"+ teams. That is the choice of LeSS regarding how big structural change you make at one time.

In the next article, we are going to dive deep in how to make incremental structural changes.

This is the fifth article in the series of seeing system dynamics in organizational change. In the previous article, we concluded that the best time to de-scale was when the organization is still small and has few roles. In this article, we take up the challenge of reducing special roles, notably managers and specialists, when they are already in place.

No role safety

We reduce the special roles to have more responsible teams, which increase the organizational adaptiveness. However, it creates the discomfort among those special roles. All kinds of concerns are raised to resist the change. As those concerns are often valid, the special roles remain and change stalls.

Seeing system dynamics in organizational change cn - 5.1.jpg

B1-loop: Reduce special roles to increase adaptiveness

To fill in the adaptiveness gap, we apply the de-scaling force, thus, reduce the number of special roles. This increases team self-organization, then improves the adaptiveness until the adaptiveness goal is achieved.

B2-loop: Increase special roles to reduce discomfort

Reducing the number of special roles causes discomfort, thus increases resistance, which keeps up those special roles.

We should ask what our system optimizing goal is. If it is for the adaptiveness but we address the discomfort at the expense of it, we lose the plot, as described in the article of "local optimization and system optimizing goal". The discomfort is the secondary concern, and it should be addressed in other ways.

In LeSS, there is a guide called "Job safety but not role safety". Managers and specialists should not have role safety, and we should not keep those special roles simply for them to feel safe.

More than ten years ago, while I was working in Nokia Networks, the organization experienced a major redesign. As a result, the PMO was dissolved. It was clear that the project manager role would be gone. I was one of the project managers, and ready to leave the organization. However, even though there was no role safety, there was job safety. The organization tried the best in helping the people adapt. Luckily - one of my life-changing moments in retrospect - I changed my role and stayed in the new organization.

Inevitably, some people would choose to exit, while we should focus on the people who choose to stay and take up the change, and help them get through difficulty.

Survival anxiety and learning anxiety

Edgar Schein in his classical book "The corporate culture survival guide" introduced two concepts - survival anxiety and learning anxiety. They are two different types of discomforts.

Survival anxiety is the discomfort that "something bad may happen to you if you don't respond in some way". It creates motivation to change and acts as driving force for the change.

Learning anxiety is the discomfort that "the new behavior that may be required of you may be difficult to learn, and the new beliefs or values that are implied may be difficult to accept". It creates resistance to change and acts as restraining force against the change. 

Seeing system dynamics in organizational change cn - 5.2.jpg

R1-loop: Survival anxiety creates motivation to change

Reducing the number of special roles increases survival anxiety, which provides the motivation to learn, thus, increases the learning. Then, the number of special roles could be reduced further.

B3-loop: Learning anxiety creates resistance to change

However, reducing the number of special roles increases learning anxiety too, which raises the fear, thus, increases the resistance. Then, the resistance keeps up those special roles.

B4-loop: Survival anxiety creates resistance to change

Even though survival anxiety increases the motivation for change, it raises the fear, thus, increases the resistance too. Then, the resistance keeps up those special roles.

The above dynamic is also reflected by two principles about survival anxiety and learning anxiety.

  • Principle one: survival anxiety must be greater than learning anxiety
  • Principle two: learning anxiety must be reduced rather than increasing survival anxiety

The real leverage is to reduce the learning anxiety by providing psychological safety, of which the two most important aspects are:

  • job safety, so that the people have time and space to learn and adapt;
  • learning support, so that the people learn and adapt effectively.

Respect for people

In summary, while we have to remove some special roles, we shall do it in a respectful way.

1. Job safety but not role safety. It is more respectful to clearly and firmly communicate the change than to blur the message.

2. Acknowledge that some people will not take up the change but exit. Be respectful for their decision.

3. Provide strong support for the people who decide to stay and take up the change, and help them learn and adapt in all ways.

This is the fourth article in the series of seeing system dynamics in organizational change. In this and next articles, we are going to look at one specific change in the large-scale product development organization: de-scale to scale. This means to simplify the organization to achieve agility, and this is the essence of LeSS too. One aspect is having fewer roles, as more roles lead to less responsible teams.

However, increasing number of roles is a downward spiral when an organization scales up. Among them, the major roles are managers and specialists. We will look at them separately.

More and more managers

The bee watchers in Dr. Seuss's book "Did I Ever Tell You How Lucky You Are?" are the best manifestation for more and more managers. They could indeed keep increasing forever.

Seeing system dynamics in organizational change - 4.1.jpg

This self-reinforcing nature is shown in the below dynamic. 

Seeing system dynamics in organizational change - 4.2.jpg

B1-loop: Increase management control for better performance

When seeing a performance gap, we increase the number of managers to have more control, then, the actual performance goes up and the gap is reduced.

R1-loop: Management control decreases motivation thus performance

However, when we increase the management control, the intrinsic motivation from the people doing the real work decreases over time, thus, the actual performance goes down. In response to that, we have more managers and more control.

B1/R1-loops create the "fixes that backfire" system archetype. We are in the downward spiral of having more managers.

When organization scales up, it is even more natural to have more managers. Let's see the below dynamic. 

Seeing system dynamics in organizational change - 4.3.jpg

B2-loop: Increase managers to reduce management load

When organization scales up, every manager has more people. The resulting higher management load decreases the actual performance. In response to that, we increase the number of managers, then, we have fewer people for one manager. This reduces the management load, then the actual performance goes up and the gap is reduced.

R2-loop: Managers create silos

When we have more managers, the silo effect gets stronger over time, which increases the management load. Then, the actual performance goes down. In response to that, we have more managers. This becomes self-reinforcing.

R3-loop: Managers hire people

When we have more managers, they tend to hire more people, so that the organization grows over time. Now we have more people for one manager, thus higher management load. Actual performance goes down, which calls for more managers. This becomes self-reinforcing too.

Both B2/R2-loops and B2/R3-loops create the "fixes that backfire" system archetype. We are in the downward spiral of having more people and more managers.

More and more specialists

When organization scales up, we have more specialists too. Let's see the below dynamic.

Seeing system dynamics in organizational change - 4.4.jpg 

B3-loop: Split into many specialities to reduce required capability

When seeing a capability gap, we increase the number of specialities, leading to more specialists. This reduces the required capability, then the capability gap too.

B4-loop: Increase learning to improve actual capability

When seeing a capability gap, we increase the learning, thus our actual capability improves over time, leading to the reduced capability gap.

B3/B4-loops create the "eroding goals" system archetype. As there is more delay in B4-loop, B3-loop becomes dominant. We get more specialties and more specialists. See more from Over-specialization and waste of potential.

R4-loop: Specialists create people gap

When the specialists gotta work in their specialities, the varying requirements create people gap in different specialities over time. The people gap triggers the hiring or moving of the people into the organization, thus, growing the organization further. The bigger organization, the more specialities and the more specialists. This becomes self-reinforcing. See more from Why product development group ever grows.

We are in the downward spiral of having more people and more specialists.

The alternative path

De-scaling is to have fewer roles - fewer managers and fewer specialists. How is it possible to not have more managers and more specialists when we scale up the organization? Is there an alternative path?

Instead of having more managers, we:

  • design for self-organizing feature teams, so that teams take more responsibility in delivering the end-to-end customer value, and there is less load for managers;
  • increase management capability in teaching and coaching.

Instead of having more specialists, we:

  • design for generic product developers with multi-specialities, so that people adapt to varying requirements, and there is less people gap for the whole organization;
  • increase the effectiveness of cross-learning.

The downward spiral is one path, while de-scaling to scale is the other path. When is the best time to take the path of de-scaling? A client once asked me to help scale up their organization, so as to keep its agility. At the time, they were still small - around 20 people for product development, but they planned to scale up to 50-100 people. They were at the crossroads, and it was the best time for the change.

Yes! The best time to de-scale is when we are still in small scale and have few roles.

If we are already in large scale and have many roles, we shall face the bigger challenge to deal with existing roles, notably managers and specialists. That's the topic for next article.

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This page is an archive of entries from August 2018 listed from newest to oldest.

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