The 3 Types of Managers You Need in an Agile Organization

Recent signs are pointing to a significant trend among many enterprise organizations: they’re trying to become agile organizations.

According to a McKinsey survey of more than 2,500 people across company sizes, industries and regions, 37% of respondents said that their organizations were carrying out company-wide agile transformations. And the results are impressive thus far.

Many companies are setting up small, interdisciplinary teams to respond swiftly to rapid market opportunities and changes in customer demands. And 80% of respondents who work in those agile units said that their overall team performance increased moderately or significantly since their transformations began.

Word of these successes is getting around, and research such as McKinsey’s survey is convincing more companies to pursue the path of greater agility.

But this 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.

Typical Agile Reporting Lines

In typical agile companies, there’s a dynamic matrix structure with two reporting lines:

  • A capability or functional reporting line
  • A value-creation line.

According to DeSmet, nearly all employees have both a functional and value-creation reporting line. The former is their long-term responsibility within the company, which 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,” with each chapter 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, and building the standard tools, methods of ways of doing their functional work.

Their value-creation reporting line sets out the employee’s goals and business needs relative to an agile “squad” or unit to which they’re assigned. Chapters deploy specific employees to appropriate squads based on their expertise and competence, but once those workers are part of an agile squad or unit, the chapters don’t set their priorities, tell them what to work on, assign work or tasks, or supervise their day-to-day activities. Instead, the squad or unit sets priorities and objectives and provides the marching orders as a “tribe.”

The focus of the tribe is making money for the company and delivering value to customers, similar to a business unit or product line in a traditional organization. But each tribe is a small team organized for rapid response and innovation rather than the slower machinations and changes of a traditional business unit or large, product-focused team.

The 3 Types of Agile Managers

Given this value-creation focus and its departure from traditional structures, management takes 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 a typical agile organization, every functional reporting line has a leader, but that person’s role is not day-to-day oversight, work approvals, or micromanagement. A chapter leader must let go of a day-to-day focus and instead focus on building up the right capabilities and people, equipping them with tools and skills to deliver functional results, and ensuring that they’re deployed to the right value-creation opportunities. Those opportunities might involve long-term roles in supporting the business but more often involve assignment to small, independent squads.

Instead of overseeing the work if 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

In typical agile organizations, the tribe leader isn’t responsible for building up their own functional capabilities. They operate as mini-CEOs and general managers focused on value creation, growth and serving customers.

Of course, they need to develop the right strategies and tactics to achieve these outcomes, and they have to 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 fit the right squad.

Being a tribe leader requires leadership and a strategic perspective, and it 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

In an agile organization, 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 and feedback as well as inspiration to team members. They also report on progress to tribe leaders. They 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 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, but 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, or audition them for permanent roles as direct employees.

At Graphite, we’ve helped organizations take both of these approaches and bring in the talent they need for an agile transformation on demand. With a network of more than 5,000 independent consultants, we offer immediate access to some of the world’s top business experts. All of them have proven experience working for the world’s leading consulting firms, Fortune 500 companies and other elite organizations, and they’re available for part-time, full-time and even roles that ultimately lead to a permanent hire.

To learn more about our network and find the talent to power your agility transformation, visit us now at www.graphite.com.

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Greg Andrade

Greg Andrade handles Graphite's marketing and communication programs. A graduate of the University of Michigan, he worked in corporate marketing for 15 years before turning his focus to virtual marketing consulting for startups and global businesses.

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