As the unpredictable becomes more predictable, many enterprises are looking to become agile organizations to fortify the business in the face of disruption.
Not only does the added business agility enable companies to better respond to changing marketplace conditions, they’re also better able to capture market share with faster go-to-market response times.
But what is an agile organization to begin with?
According to Mckinsey, an agile organization “comprises a dense network of empowered teams that operate with high standards of alignment, accountability, expertise, transparency, and collaboration. The company must also have a stable ecosystem in place to ensure that these teams are able to operate effectively.”
But making the move to becoming more agile poses a common challenge for many organizations when they and their workers are used to more traditional, hierarchical structures. In particular, many companies wonder how this will change the role of managers and how they should manage in an agile organization.
McKinsey senior partner Aaron De Smet laid out some of the answers in a McKinsey Quarterly piece on The Agile Manager. But the simplest way to understand agile management is to get a sense of what an agile structure usually looks like and what this means for managers and reporting lines.
Understanding the Agile Organization Structure
In typical agile companies, there’s a dynamic matrix structure with two reporting lines:
- A capability or functional reporting line
- A value-creation line
Capability/Functional Reporting Line
According to DeSmet, nearly all employees have both a functional and value-creation reporting line. A capability or functional reporting line refers to an employee’s long-term responsibility within the company. This might involve performing a certain function, such as a web developer or market analyst.
In agile language, these functional reporting lines are often called “chapters.” Each chapter is responsible for building up a capability. Chapters do that by:
- Hiring, firing, and developing talent
- Evaluating and promoting people
- Guiding workers along their career paths
- Building the standard tools and methods of ways of doing their functional work
Think of chapters as different departments in an organization that define "how the company works." Examples of chapters include the market research chapter, corporate strategy chapter, and development chapter.
Value Creation Reporting Line
In contrast, the value creation reporting line defines the employee’s goals and business needs relative to an agile “squad” or the unit/team they’re assigned to.
Chapters deploy specific employees to appropriate squads based on their expertise and skill level. Once a worker is part of an agile squad or unit, the chapters don’t set their priorities.
Instead, the squad as a unit/team defines and sets the priorities and objectives. They also work together to develop the marching orders as a “tribe.”
The focus of the tribe is making money for the company and delivering value to customers. It’s very similar to a business unit or product line in a traditional organization. But the difference is that each tribe is a small team organized for rapid response and innovation.
It's this small group of individuals hyper-focused on one objective that unlocks organizational agility — enabling companies to respond to changes with speed when compared to how a traditional business unit or large, product-focused team operates.
The 3 Types of Agile Managers
Given this value-creation focus and its departure from traditional structures, management and leadership take on new roles in an agile organization. In this case, a traditional mid-level manager is reallocated to three different roles:
- A chapter or functional-line leader
- A tribe or value-creation line leader
- A squad leader
Let’s take a look at each of these three roles and what it means within an agile organization.
1. The Chapter Leader
In an agile organization, every functional reporting line has a leader. Yet that person’s role is not day-to-day oversight or work approvals.
A chapter leader focuses on building up the right capabilities and people, equipping them with tools and skills to deliver functional results, and ensuring they're deployed to the right value-creation opportunities. Those opportunities might involve long-term roles in supporting the business but more often involve assignments to small, independent squads.
Instead of overseeing the work of these squad members closely, chapter leaders work with feedback from tribe leaders, team members, and other colleagues to evaluate their performance. They rely on the same input as they continue to build and develop the right capabilities and assign the right resources to agile squads.
2. The Tribe Leader
Think of the tribe leader as a mini-CEO/general manager whose sole focus is on value creation, growth, and serving customers. Their responsibility is to develop the right strategies and tactics to achieve these outcomes. They must determine what work must get done, how much to invest in certain efforts, and how to prioritize opportunities.
They then work with chapter leaders to find the right people to build the right squad.
Being a tribe leader requires leadership and a strategic perspective. It also takes a cross-functional and profit-and-loss viewpoint. It’s not about owning the people working for the tribe or managing their day-to-day work. It’s about making the right business decisions, implementing the right strategies, and managing goals and priorities.
3. The Squad Leader
The squad leader is essentially the team or unit leader, but that doesn’t mean being a “boss” for team members. A squad leader plans and orchestrates work execution and works to build a cohesive team.
Additionally, squad leaders provide coaching, feedback, and inspiration to team members. They also report on progress to tribe leaders and provide input on the development and performance of team members to relevant chapter leaders as well.
This is usually a good role for someone who has developed leadership skills or has an interest in learning them. But the right person must lead the squad without exerting too much control.
Getting the Best of Both Worlds with Agile Management and Structure
Using agile management and structure, traditional organizations can ultimately get the best of both worlds. They can make an agility transformation while still enjoying the benefits of the size and scale they might get from being an enterprise organization.
For example, they can tap the deep, functional expertise as well as the leadership capabilities that exist within a larger organization. Still, they can do it by assembling small squads and units that innovate and create value with the speed and agility of a small startup.
Of course, this still requires having and developing the right functional experts and identifying leaders that can manage effectively and non-intrusively. In some cases, training, development, or new hiring may be needed to close gaps and bring together the right talent.
But another effective strategy is to hire independent consultants and business experts to complement your existing teams and provide functional expertise or leadership.
At Graphite, for example, we recently helped an organization set up an Agile Transformation office for its end-client by connecting them with a Scrum Master with over 10 years of experience working in the industry.
In this case, the Scrum Master expert can enable the deployment of squads and ensure the tasks established by the tribe leader are accomplished as directed. The same approach can be applied to enterprise organizations as the agile approach compliments the use of independent experts perfectly.
Think about it. Small teams are created to solve specific problems by working on a project for a specific timeframe. Independent experts are also often used to solve a problem by working on a project for a specific time frame as well.
As disruption becomes the new normal, agility is increasingly becoming a necessity to thriving in the modern age. Understanding how to orchestrate your workforce, whether it's solely with full-time employees, independent contractors, or a combination of both will be key.
To learn more about how to optimize your workforce, download our guide, The Ultimate Workforce Optimization Guide to learn more.