The Agile utopia
This is a follow up to Cesar’s short comment on Agile, leaders and the principles of democracy.
First I want to stress that democracy is not necessarily a representative democracy. Representative democracy appeared fairly late to make democracy work in ‘large’ countries (Montesquieu was contending that democracy could not survive in a large country that is not isolated, like France). Anyway, it is a fact that representative democracy does not typically lead to the emergence of the best leaders except in times of dire need because it is a game of seduction and compromission (this is frenglish, see a definition here). So nominating managers democratically may not lead to more efficient or useful managers. One of the problems noted by Tocqueville in the early american democracy was that elected officials were submitted to the whims of the people. That impaired their ability to sustain a strategic vision. This lead to the progressive lengthening of public mandates.
Second, one very important difference between a country and a company is that, following Cesar’s view there are two potentially conflicting interest that need to exercise power. One is the employees. The other is the shareholder. There is a well documented history on the conflicts between these two parties and the subsequent emergence of unions. Ultimataly, the decisions lie with the shareholders in a liberal economy. One possibility to solve this contradiction is to create a cooperative where the shareholders are also the employees. It is a case when Cesar’s vision can be realized.
Which leads to my primary thought on the Agile company: it is the shareholders that impose it from the top. I believe it is in the shareholder’s interest to create a somewhat agile environment for his company. For it to happen, the shareholders must take responsibility to impose their rules and criteria on the management they are supposed to designate. This means the shareholders have to impose transparency and verify the integrity of the data and the decisions from the top. I believe that in such a company there would not need to have a lot of management layer. The board of directors could do most of the senior management work because in such a company their primary role would be to enable team collaboration at the level it needs to happen. Management would then be scaled back to what it essentially should be, an administrative support function stripped of most of the power that it attached to itself thanks to the command and control model.
I am fully aware that this is a bit of a day dream although I am pretty certain that some companies approach this model (the shallower the hierarchy, the closer). I don’t know if it can be generalized or even if it can be applied to all business models. And to be quite frank I am probably out of my depth here and I can feel a lot of sharp teeth nibbling on my feet so I will stop here.
A day passsed.
After writing those lines, I decided to document myself a little bit more and found two articles on self organizing work places: Volvo Uddevalla and GE Durham which are interesting to read in the context of this article and Cesar’s comment. However it got me confused because the Agile movement tends to claim to descend from the Lean production system (see Agile in Action for instance). These experiences are deemed opposed to Toyota’s approach but they are awfully close to what I would imagine an Agile company to be. Also to be noted that in both of these experiment, it required a special kind of employees to make it work.
November 23rd, 2007 at 3:17 pm
Fortunately, companies like you describe do exist, we just call them bootstrapped startups (this excludes VC-funded startups). That, and, The Cheese Board.
The problem is, that in order to benefit from the kind of employee-owned democracy you’re describing, the employees have to shoulder significant financial risk. Most people aren’t willing to do that and hence they don’t get the kind of say in matters they ideally would like to have.
But I think that’s the real crux of the matter here, and something you hinted at when you said democracies don’t get the best leaders except in times of dire need: people (managers and worker-bees included) don’t make the most optimal decisions for the company unless they have something significant at risk. That’s why anyone who wants to have a say should also be required to have something to lose from the decision.
November 24th, 2007 at 2:39 am
Good points Tim. I believe however that people are not necessarily motivated by something to lose. It can be equally motivating to have something to gain. And also, sometimes, as the GE example seems to indicate, the simple fact of having a say on some matters is enough of a stake.
Also most managers have no interest in making themselves irrelevant.
Finally we can easily picture small entities that work on this kind of paradigm but how does that scale ? (ah scalability, the buzzword of the year !)
November 25th, 2007 at 8:10 am
Ya know, I’m getting really tired of reading in various places, from blogs and attendant comments through articles and comics like Dilbert, that ALL managers are no good, don’t care, can’t lead, abuse their people, get in the way of innovation, are totally valueless, etc., etc.
Having spent the last 30-or-so years working with mangers at all levels, from newly promoted first line supervisors through CEOs I’m here to tell you that it just ain’t true.
I know marvelous managers at all level and in all sizes of companies, including bootstrapped start-ups, just as I know rotten ones as well as the entire range between those two extremes.
I’m the first to say that I don’t have a good grasp (actually no grasp) of Agile and many of the things you’ve mentioned, but I have a great grasp of people and it’s the worst kind of simplistic attitude to predicate ideas/actions on the idea that all managers wear black hats and non-managers white ones. I dread the thought of a company that elects its managers. What makes you think that either the candidates or the voter turnout would be any better than they are in political elections—whether local or national?
Culture matters. Some of the most successful/innovative managers and companies on the planet—Lou Gerstner (http://www.amazon.com/gp/product/0060523808/qid=1152560499/sr=1-1/ref=sr_1_1/103-5593467-3647000?s=books&v=glance&n=283155), BMW (http://www.rampupsolutions.com/blog/?p=241), Nucor (http://www.businessweek.com/magazine/content/06_18/b3982075.htm), Immelt/GE (http://www.businessweek.com/magazine/content/05_31/b3945409.htm?campaign_id=search), IBM (http://www.businessweek.com/magazine/content/06_14/b3978073.htm), Best Buy (http://www.leadershipturn.com/leaders-that-do-brad-anderson-and-culture/) and, of course, Google (http://www.webwereld.nl/articles/47314/google-finds-r-amp-d-opportunities–pitfalls-abroad.html) are proof.
No, they aren’t perfect and no, not every manager buys into the culture, but, then, perfection doesn’t really exist, does it?
November 27th, 2007 at 4:39 am
Miki, I happen to mostly agree with you.
My experience also tells me that, especially in financial institutions where political games try to emulate those of imperial Rome, the positive part quickly disappears to conform the system.
So one of the original questions was how do you change that system to make it possible for agile teams (close to autonomous units of production) survive.
My point is, to resolve that, the way managers are evaluated needs to change and it is the share holders (private equity, wall street investors or employees themselves) who can make that change happen.
December 12th, 2007 at 9:35 pm
I don’t claim that agile approaches descended from Lean or the Toyota Production System. I do feel, however, that Lean does complement agile approaches (specifically XP and Scrum, in my experience) magically.
December 14th, 2007 at 4:46 am
Thanks for the clarification Simon.
I may be confused by the regular association between Agile and Lean.