It’s not easy to get team structure right. There’s never a perfect way to do it. Every option has tradeoffs. But you’re more likely to choose the right structure for your organization if you think about it from principles instead of just copying what you saw at a past company or what you read about in a business book.
One of the trickiest problems leaders face is getting org structure right. This is even harder in Agile orgs because there are strong opinions out there about the perfect team structure that often don’t apply easily in real orgs. In this episode, Peter and Richard share 6 principles you can use to reason about the right team structure for your context.
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Episode Transcription
Peter Green
I remember when our team first adopted Scrum in 2005. We had a designer, 12 or so developers, and another eight or nine testers. About 15 of us were in Seattle and another 5 or 6 were in our Hamburg, Germany office. When we learned about Scrum, we had heard that we were supposed to form cross-functional teams of about 7 people. But how, specifically, to do that was not very clear.
So, we spent our first four or five months experimenting with different variations on team structure before finally figuring out the structure that would work for us. And that was on a clearly defined product team with only about 20 people on it—which is pretty small and self-contained compared to many organizations we help today, where there might be hundreds of people with nebulous team boundaries, matrixed stakeholder relationships, and no clear, predictable path to cross-functional, minimally-dependent teams.
Richard Lawrence
As we’ve worked on this problem over the years, applying our own intuition and experience, informed by research and advice from experts on team structure, and size, and conditions for success, we’ve discovered a few important principles that you can use to find the right team structure for a particular organization. In this episode, we’ll share those six principles that we use to help our consulting clients think through their org structures. But first, a reminder that this show is a free resource sponsored by the Humanizing Work company.
Humanizing Work exists to make work more fit for humans and humans more capable of doing great work. To that end, we do training and coaching in three areas:
- First, we help leaders lead empowered teams and individuals more effectively, including getting org structure right.
- Second, we help product people turn their ideas into good visions, experiments, and backlogs.
- And third, we help teams collaborate better to produce meaningful outcomes on complex work.
If you or your organization would benefit from better leadership, better product management, or better collaboration, and if you find our vision for human-centric work compelling, visit the contact page on humanizingwork.com and schedule a conversation with us.
Peter
Ok, it’s not easy to get team structure right. There’s never a perfect way to do it. Every option has tradeoffs. But you’re more likely to choose the right structure for your organization if you think about it from principles (instead of just copying what you saw at a past company or what you read about in an interesting business book).
Richard
So, let’s get into the principles: Principle 1 is that Complex work requires collaboration.
Some work is predictable. We can make plans and specifications for it, execute those plans, and get the expected outcomes.
Other work resists planning. No matter how carefully we plan, new information emerges as we do the work. In the solving, we discover both the solution and the problem.
This latter kind of work—complex work—benefits from collaboration, with multiple people doing the work together, often across specialties. Because the details of the work emerge as we do the work, we can’t plan tasks and handoffs in advance. We need to be able to respond to that emergence dynamically.
Peter
So, consider what areas of your work look like this. Where are people creating new things or working with new technology? Where is the work shaped by the future preferences and behaviors of humans? Where is there integration or dependencies? Where are there external factors outside your control that shape the work in unexpected ways (like competitors, markets, regulation, the weather, etc.)? Those are places where you have complex work that would benefit from collaboration.
On to Principle 2, which is that teams are the best structure for collaboration.
When work requires that type of collaboration, a team is the best structure to own the work. When a team owns a work item together, they can dynamically figure out who needs to do what and when. Because they share the same priorities—this is our most important thing to complete—the collaboration isn’t interrupting some other commitment.
Moreover, as teams remain relatively stable over time, team members get better and better at communicating and collaborating, and work flows more smoothly. This increases the time spent adding value and reduces the time spent coordinating the work.
Richard
So, for those places where you’re doing complex work that benefits from collaboration, it makes sense to form a cross-functional team around that work. Locate complexity inside teams. Try to avoid having complexity span teams—because collaborating across teams is really, really hard to do well.
All right; speaking of teams, Principle 3 is that teams need six conditions to be successful.
We’ve covered this in more detail in episode 63—which we’ll link to in the show notes. But briefly, research shows that teams need three essentials and three enablers. The essentials are:
- First, a compelling purpose–some reason why a team is required: Why can’t we just assign this to a skilled individual or two?
- A team needs the right people, meaning all the skills required to deliver on the team’s compelling purpose along with the appropriate teamwork skills to be able to collaborate to get those things done.
- It needs to be a real team, which means it’s clear who is on the team and who’s not; there’s a clear team boundary.
Peter
With the three essentials in place, there are three enablers that build off that foundation:
- First is what we call “sound structures,” which refers to the playbook, the processes, and agreements that the team chooses that enable these people to collaborate effectively towards their compelling purpose
- Second is supportive context, which means the team can get what they need from outside of the team boundary when they need it. While sound structure refers to things the team does within the bubble, supportive context is about getting things into the bubble from outside of it, like the resources, or authority, or information needed to achieve their purpose.
- And third, finally, is what we would call competent coaching; the team can get help when they’re blocked, stuck, or having an internal conflict. And the research shows they don’t need this all the time, but they definitely need it when they need it.
These six conditions are prerequisites to many of the more common things we think of when we describe effective teams; like trust, or safety, or effective communication, and they require intentional effort by organizational leaders to get them right.
Richard
On to Principle 4, which is measure and improve the time from idea to realized value to see what’s really going on.
So, a good way to evaluate your current org structure is to map out the flow from someone having an idea of something that should happen, to someone actually experiencing the value of that thing, once you’ve created it. Who needs to touch the work item? How long does it take with each person or team? How long does it wait at each handoff? How often does it loop back to an earlier step for rework?
Places where you find handoffs, wait time, loops, and rework in your value stream map are signals about a possible mismatch between the shape of the work and the shape of your org. In terms of principles 1 and 2, it’s probably telling you that you have complexity spanning teams.
Peter
Principle 5 is that value and complexity are in different places in different organizations. This principle implies that you can’t just copy and paste an org structure from one company into yours and have it work.
In one organization, the value and complexity might span an entire customer journey. Ideally, slices of value across that whole customer journey could be handled by a single cross-functional team (or, for scale, multiple teams, each of which has the skills to handle those complete slices of value). That was the structure on our original Scrum team, with three cross-functional teams each focusing on a specific type of user for our product.
In another organization, the complexity is deep in one highly-technical part of a customer journey. In that case, it might make sense to build a team focused on just that complex technical problem and the piece of the customer journey where users experience that problem being solved. Other teams could own other parts of the customer journey.
Richard
Leaders often make the mistake of trying to replicate the org structure that worked in their previous organization. But the value and complexity there were likely arranged differently, and as a result, the right team structure would have been different. It’s critical to observe the current organization and shape teams to match that unique context.
And finally, Principle 6 is that organizations change over time.
Org structure is itself a complex problem. The tradeoffs associated with a particular org structure may not be obvious and they may emerge over time.
And the context changes over time—complexity gets resolved in one area of the work and pops up in another. So, yesterday’s “perfect” org structure isn’t necessarily today’s. Expect to have to slowly change structures over time as the work changes.
Peter
Are you a leader with a sense that your org structure may not fit your current challenges? We’ve helped dozens of leadership teams apply these principles to their unique context. Visit humanizingwork.com/contact to schedule a free consultation to discuss how these principles apply in your work. We help our clients think more clearly about their challenges, bring lessons from hundreds of organizations to the table, and can even help craft safe experiments for tricky problems like org design.
Thanks for tuning in!
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