7 Organizational Design Principles
More with LeSS: Simplifying Organizations with 7 Design Principles
Why adopt agile or LeSS? Unfortunately, many organizations aim to increase individual or team productivity, activity, outputs, velocity, or resource utilization without realizing this usually leads to lower overall value delivery, longer cycle times for customer features, and less adaptiveness. LeSS does not focus on local optimizations such as increasing individual productivity, but on optimizing an organization for maximizing customer value delivery and organizational agility (adaptiveness)—the ease, speed with which an organization of people can change direction based on learning.
How to achieve agile, flexible, adaptable organizations? By creating simpler organizations!
Complicated organizations with many roles, processes, departments, and artifacts are slow to adapt to changes. Simple organizations have the potential to adapt quickly. In the LeSS community we refer to this as descaling organizational complexity. It is the essence of one of the LeSS principles, the More with LeSS principle.
How can we design simpler, agile organizations? We use the following organizational design principles to descale into LeSS organizations:
- From Specialist Roles to Teams
- From Resource-Thinking to People-Thinking
- From Organizing around Technology to Organizing around Customer Value
- From Independent Teams to Continuous Cross-team Cooperation
- From Coordinate to Integrate to Coordination through Integration
- From Projects to Products
- From Many Small Products to a Few Broad Products
1. From Specialist Roles to Teams
Traditional organizations have single-specialized roles and elaborate processes on how these roles ought to interact. Individuals are responsible for their individual specialization. They are hired for that and might spend their entire life in that area of specialization. When all individuals perform their defined role, the organizational performance is maximized, in theory. Adaptiveness is likely to be low.
LeSS organizations have teams that have a shared responsibility for achieving a customer-centric goal, by self-managing—they themselves decide how they work and who does what. Team members are not stuck in the false dichotomy of being a generalist or a single-specialist. People naturally have preferences, yet they are not limited to a single specialization. Many specialist roles, such as tester or interaction designer or business analyst, cease to exist as these responsibilities become team responsibilities. Broad responsibility and self-management increase adaptiveness.
2. From Resource-Thinking to People-Thinking
Traditional organizations manage people as resources, assuming the skills of individuals are relatively fixed. They are structured to maximize the utilization of these resources against the goal of increasing individual productivity. This requires significant management effort to resolve these complicated resource allocations.
LeSS organizations manage people as people and assume that the greatest skills of individuals are acquiring and developing skills. LeSS organizations are structured to purposely cause a mismatch between existing skills and knowledge and those needed, for the benefit of increasing adaptiveness. This requires people to learn, which causes both joy and discomfort… but all the complicated resource management disappears.
3. From Organizing around Technology to Organizing around Customer Value
Traditional organizations structure their organization around their technology. Many people identify themselves with their technology specialization and organizing around this seems to maximize their individual productivity. Delivering customer value often requires more than one technology and that causes additional coordination effort and reduced adaptiveness.
LeSS organizations structure their organizations around customer value. Deep understanding of customers is essential for solving their problems using technology. Bringing teams close to customers by organizing them around customer value increases this understanding and leads to greater adaptiveness and more customer value.
4. From Independent Teams to Continuous Cross-team Cooperation
Traditional organizations prefer independent teams that can focus on their part of the product. These teams avoid continuous interruptions by specifying well-defined interfaces to which other teams must adhere to. Change, review, and approval processes avoid frequent changes to these interfaces. Often independence is achieved by hiding and delaying genuine dependencies. This isolation of teams reduces organizational flexibility.
LeSS organizations prefer multiple teams with shared work. These teams continuously cooperate to contribute to one consistent product. They function like one larger team, even though each team has their goal and own identity. Change, review, and approval can be greatly simplified or even disappear.
5. From Coordinate to Integrate to Coordination through Integration
Traditional organizations coordinate to integrate the output of many teams. Because the teams deliver their outputs asynchronously, the coordination responsibility is external to the team, leading to coordination roles (such as project and release managers) and coordination events. Coordination conflicts are common, leading to re-evaluating and shifting priorities.
LeSS organizations have teams that continuously integrate their work. Through continuous integration the teams discover opportunities for cross-team collaboration—a surprising and powerful idea. Because of the synchronous nature of cross-team integration—the teams have shared work right now at the same time—the coordination responsibility can be integrated into the team. External-to-team coordination roles disappear.
6. From Projects to Products
Traditional organizations manage development as projects or programs—big projects. Projects have clear start and end dates, clear scope. People are allocated to them for a predetermined amount of time. Budgets are decided by the expected value of the predetermined scope. This leaves little room for responding to changes. Myriad and varying projects cause complicated project portfolio management to synchronize the re-allocation of resources to projects.
LeSS organizations manage development as products. Products have a clear purpose but no fixed end or scope. People are allocated to them for an undetermined amount of time. Budgets are decided by potential value without tying it directly to a specific scope. This leaves lots of room for responding to change. A product is continuously developed and therefore a regular rhythm of re-allocating the people to products will suffice. Complicated project portfolio management disappears.
7. From Many Small Products to a Few Broad Products
Traditional organizations prefer managing small technology-based products such as services, components, applications, or platforms. But no such small product is an island and they need to interact and be integrated together to deliver customer benefits. This leads to complicated cross-product management structures for coordinating, prioritizing, and budgeting.
LeSS organizations prefer managing broad customer-centric products. The services, components, applications, and platforms belong to one product with one Product Backlog and one Product Owner. Teams create customer-centric features and work across these components. Complicated portfolio management disappears, and complicated cross-product management structures disappear or become significantly simpler.
Each organizational design choice requires a significant shift in organizational thinking and they have a large impact on people, teams, organization structure, and management. These changes aren’t always easy but they lead to simpler, adaptable, purposeful, and more fun organizations that deliver higher value.