I want to share my view on what problems are created by functional departments and hierarchical structure. Only organizing your company around value can solve these problems. But for that you need to have a bit different view on things and another level of transparency. Every team must know how they “earn money” (in quotes because it might mean different things in different companies). Don’t you think that we use Scrum to solve exactly the same problems?
There are couple problem areas around this topic
- Developers is responsible for non-functional requirements: response, multi-language, hardware
- Product people are responsible for business only decisions
- But real business decision consists of both things and you can find right balance without having information from both worlds. The only answer to this is cross-functional teams with different expertise. Like startups!
Functional departments make it difficult to focus on value creation for clients
- For example IT team. They understand that there are 40 servers, but it’s not always to map this to value creation and prioritize this properly. Especially when you have lots of teams. Basically it is not obvious that there might be serious impact for business if hardware purchase is late for couple of days. KPIs are often introduced to control the process, which leads to other problems like gaming metrics and etc.
- Similar problems occur with billing departments who monitors e.g. travel costs between offices. If to analyze single expenses number it might look high, but you must understand there is a business decision behind each travel.
- Functional departments with unique knowledge must change their thinking from control to self-service and information sharing. To challenge that even more, same services could be bought outside the company if they are of better quality.
- It’s very easy to end up in a situation that you are doing something because someone told you. Team does things not because the boss comes and tells what to do, but because you know the market and want to achieve something interesting
- When you know what value is created by your team and you know how you “earn money”/”create value” this question doesn’t occur at all. You just do what is necessary and when it’s necessary. You know that you won’t be able to survive if not doing valuable things
It seems that organization that is built around value fosters
- Right behavior
- Desire to achieve results faster
- Increase of transparency and information sharing: e.g. I try to share as much info as I understand my self – cost index, expenses and etc.
- Understanding that you know and want to bring value, but not just do some stuff
- Destruction of comfort zone. I had a post about comfort zone here.
Will be giving speech about this topic during Agile Day Riga