Looking at the role of management in developing self-conscious and agile organisations

Having successfully reimplemented our e-commerce website www.otto.de in a highly decentralised, agile project approach, we currently face the challenge of establishing an agile mindset outside the cosy cheese dome of a well-protected and well-specified project. During this project we felt like living on a separate planet. Business and technology work entwined, scope was managed by ourselves, we had the liberty to change and adapt our processes and methodologies, introduced an agile management framework, implemented Scrum, built autonomous and cross-functional product development teams and closed feed-back loops with continuous integration and delivery. Or putting it a different way: we learned how to change into a learning matrix organisation. This process was thrilling, demanding to all of us and we are proud of having mastered this challenge. After leaving our project “Lhotse” behind and literally lifting our project cheese dome, we are now facing an urge to change management culture and improve our capability in inter-organisational collaboration.  The severity of this problem is easy to grasp when reading Steve Denning’s article “Why do managers hate agile” in the Forbes Magazine.

Steve describes high and broad tensions between an agile mindset and a management-driven approach as a clash of two different worlds. A vertical management world, where strategy gets set at the top, power trickles down and where the purpose is evident: make money for shareholders. This vertical world collides with an agile, horizontal world. Its purpose is to delight customers and making money is the result, rather than the goal of activities. It focusses on continuous innovation and enablement rather than control. These worlds appear to be traveling different orbits.

Presumably, one of the prime tasks of management is to bring these two worlds to get to know each other better. Trying to understand how to establish an inter-orbital communication, I stumbled over the “Laloux Culture Model”, which is brilliantly explained and depicted by Peter Green in his blog post “Laloux Cultural Model and Agile Adoption”. Frederic Laloux‘ book “Reinventing Organizations (2014)” created this model in order to answer the question, whether it is possible to reinvent organizations, to devise a new model that makes work productive, fulfilling, and meaningful. Actually, Frederic talks about successive stages of human and organizational consciousness. Two of these stages are especially relevant for our situation:

maschineThe „achiever“ organizations aim at beating their competition by achieving profit and growth. This level of organizational consciousness is built on the idea of a machine, where each individual gear-wheel contributes to this overall goal. Management by objectives and meritocracy are the tools of this vertical world and individual accountability is the grease to each and every gear-wheel. The leadership style is in consequence goal- and task-oriented as well as decisive.

familyThe next development stage superseding „achiever“ organisations are „pluralistic“ organizations. Within the classic pyramid structure of organizations, focus lies on company culture and on empowerment of people in order to achieve extraordinary employee motivation. Teams strive for holistic stakeholder satisfaction (internal as well as external), derive their decisions on shared values and demand high engagement from everyone in the organisation.

„Pluralistic“ organisations provide a meaning in work beyond being a part of a profitable machine. This is especially relevant keeping in mind, that the profit motive of „achiever“ organisation feels less relevant to most employees, and that monetary incentives may even be a countermeasure to engaging employees (be sure to check on a fine Animation by The RSA on „Drive: The surprising truth about what motivates us„).

The agile and lean movement evolved from companies with a „pluralistic“ culture.

From an „achiever“ management perspective, agile methods and proceedings are merely means of improving organisational efficiency. This misconception, based on the cultural context, is the key reason of mismanaging agile organisations. Without adopting the cultural elements of the „pluralistic“ organisation, only ideas from the agile and lean movement are accepted, that fit the „achiever“ perspective, such as top-down decision-making. This conflict between self understanding of teams and an „achiever“ management perspective will in time deteriorate the team culture and motivation.

Changing an organisation culture is tough, needs to be enforced by the top management and could just be a bridge to far for most of us. When in doubt, you might want to double-check with John Kotter’s „The Key to Changing Organizational Culture“ in the Forbes Magazine. Allthough, developing and evolving a „pluralistic“ culture on a team level is a valid alternative to strive for in management.

This is true for three reasons:

  1. A valid meaning to work, derived from a common understanding and set of values, is the best motivation and leads to long-term employee loyalty
  2. Inheriting the cultural aspects of pluralistic organisations, teams following the principle ideas of the lean and agile movement will produce results faster, are able to react and change quicker and will be superior in coping with complexity (e.g. as we find it in software developement at http://www.otto.de)
  3. „pluralistic culture“ is the foundation of high performance teams

The first reason is deducted from the Laloux Model, and stands for itself, as it directly addresses people. The second reason is well explained by the Cynefin Framework, as described by Dave Snowden.


I am certain, that not only designing an enterprise e-commerce platform from a customer perspective is a rather complex problem in itself. Looking at the methodology, the product development organisation needs to be able to close the loop of probe, sense and respond quickly and efficiently, in order to minimize cost of change. The complexity of enterprise software development and architecture sets empiricism as the guiding paradigm in short term decision making (the long term decision making requires foundation in an overall product strategy). This has been the motivation for introducing Scrum and Continuous Delivery to the product development of http://www.otto.de.

The third reason targets the team. The FIT „Functioning Integrated Team“ model depicts the elements of high performance teams.

FIT high performance teams

On the level of the intellectual team agenda, we see elements of an agile methodology. A well-defined core work process such as Scrum, clear goals and objectives either derived from the strategy, or from overall product goals, and a clear understanding on how decisions are made and communicated, are essential to turning input into output. In this transition, lean principles such as designing MVPs ensure the reduction of superfluous effort, by measuring and learning from customer behaviour. Focus on reaching shared and meaningful goals in the eyes of stakeholders, is an essential driver for pluralistic cultures. On the emotional team agenda, a team commitment in a shared team responsibility, builds on the team values, standards and behaviours. These elements are the main differentiation between „achieving“ and „pluralistic“ cultures.

Don’t lose out of sight, that goals and priorities remain essential for a high performing team to build up a team culture and commitment. A „pluralistic“ culture delivers this foundation implicitly. A „achieving“ culture compensates this only by deducting well defined goals from a mutualized strategy and a shared vision – better be sure to have all this in place as a manager.

Hence, as a manager, you may still see agile and lean ideas merly as processes as efficiency drivers in your organisation. But not because you cherry pick what suits your „achieving“ view, but because these ideas build on an understanding of a „pluralistic“ organisational culture. This culture, even if it is only on the team level, will not only increase satisfaction on employee level, but in addition make your organisation fit for change and innovation. In other words, it turns teams in to high performing teams.

Concluding, the role of management in developing self-conscious and agile teams sums up to

  • State a clear vision, strategy and corresponding goals
  • Empower the product development teams to make decisions based on facts and assumptions in a culture of participating leadership
  • Orchestrate individual team skills and foster team building to create an atmosphere of mutual trust
  • Define clear goals as well as roles and responsibilities in and outside of the team
  • Manage conflicts especially spanning cultural breaches
  • Protect your teams from diverting cultures by suitable processes and organisations
  • … and stay out-of-the-way!

In doing so we hope to build a corporate test & learn culture – stay tuned for updates on our progress in this blog.