If we are doing something for our user, (who now secretly turned into a customer, because the user now does not actively use our work product) we need to focus on the workflow for the activity. This workflow is actually the value stream. There is a number of methods or recipes out there that tell and educate you on how find the value stream. Just find it yourself. When you are done you will have a structure like this:

Value stream for a hypothetical activity executed for our customer

There are three “swim lanes” associated with with three different teams or competences or manufacturing stations, and the work is being passed through the different entities and teams until it gets finished. There are parallel activities, there are dependencies. Each box describes a discrete activity that has a start and an end, receives some specific input and delivers a specific output. This work breakdown is like an architecture of the workflow. The building blocks are specific activities. Time by the way is running from left to right. There might be some improvement potential, but at least the work is structured and well prepared for improvement measures. I will not discuss them here. They are in the expertise of lean management or lean manufacturing.

For me it is enough that we see clear input and output and clear interfaces. The work can be modularized and measured and improved in the sense of scientific management – if the management knows how to do the steps in the boxes or we can use the ideas from the Toyota Manufacturing System to have the value generators improve the process. (The only place where value is generated is a the shop floor. Everybody else is doing work classified as “non value-add necessary”. In best case. All other cases qualify as “waste”.) In a way, this is also classical scientific management by F.W. Taylor.

In the case of a physical or logical product, i.e. some output the customer wants to use him or herself to generate value no his/her own, we have a similar concept: the boundary diagram.

A boundary diagram for a system. Boxes denote an internal structure called subsystems. There are well defined inputs and outputs for the system and its subsystem.

There probably are a number of definitions for boundary diagrams. A very simple one is that we structure the system in such a way that all sub-units are independent and communicate with the environment though interfaces with defined

• material transfer
• information transfer
• energy transfer
• mechanical contact.

(Yes, information transfer is the same as energy transfer in a Physics world, but in engineering it is smart to separate both, even when it is not correct at all.)

If you follow me down this rabbit hole (see “Alice’s Adventures in Wonderland” by Lewis Caroll), we can realize that all products and services can be implemented in independent boxes with defined interfaces. Pretty spooky thing, right?

Now it is time to learn from some big guys. I can describe everything in units with interfaces. Sounds like service based solutions. Yes. This would be service based and each box represents a service. If I now freeze the interfaces, all these services now become independent. Correct? In consequence, all the insides of the boxes can be hidden behind a magic curtain. You might want to check out the famous example of the Mechanical Turk. From the outside you cannot detect if there is a machine or a person. (Yes, you can remember the Turing test now ). Same story: as long as I do not tell you what is in side the box, I can do what I want and you will not be unhappy as long as I am delivering according to what I promised. In our speak: I deliver according to my output specification.

If you are at that point, you may want to check the ideas of Simon Wardley on Wardley mapping. (Simon, I know I am oversimplifying, but this is the way my brain works. Sorry.) The Amazon way of monetizing services is also an option. I believe this is how Amazon Web Services were started.

Back to our architecture. Perfect situation: I am free to do whatever I like if and when I keep my promise. I can optimize my work. I can use the tools I want, I can use the methods I want, etc. Which tools and methods do I want? Typically the ones that make my life as easy as possible. Nature always takes the path of least resistance. No, that is a lie. Nature takes the path of least action, which is the physicist way of saying: “The path of the least effort.” We can describe nature pretty well, when we assume it to be lazy. Now tell me Physics is not fun. After sneaking in some Richard Feynman wisdom, let us have a look at the ideas of Application Programming Interface first (API-first) as a useful concept.

The Steve Yegge’s “Google Platforms Rant” CSE 452: Google’s Introduction to Distributed System Design

“[…]

His Big Mandate went something along these lines:

1. All teams will henceforth expose their data and functionality through service interfaces.
2. Teams must communicate with each other through these interfaces.
3. There will be no other form of interprocess communication allowed: no direct linking, no direct reads of another team’s data store, no shared-memory model, no back-doors whatsoever. The only communication allowed is via service interface calls over the network.
4. It doesn’t matter what technology they use. HTTP, Corba, Pubsub, custom protocols – doesn’t matter. Bezos doesn’t care.
5. All service interfaces, without exception, must be designed from the ground up to be externalizable. That is to say, the team must plan and design to be able to expose the interface to developers in the outside world. No exceptions.
6. Anyone who doesn’t do this will be fired.
7. Thank you; have a nice day!

[…]”

This is what Steve Yegge claims has been mandated by Jeff Bezos for Amazon. Quite some time ago.

In the light of what we just looked at before, these are some simple rules to follow in order to generate something very modular, adaptable and externizable, i.e. if you find the function somewhere a bit cheaper and it is not of strategic value for you, buy it, don’t make it. If you can sell the function as a service: sell it. Maybe you have heard of Amazon Web Services before. Something they sold to the outside world. This is the meaning of “externizable”. If you can sell it, sell it as a package. The same thing in reverse: If you can sell it as a package, you can easily also buy it from somebody else and weave it into your solution.

Wait a second though. Steve Yegge writes that Jeff Bezos wrote about teams, while I talked about functions and subsystems. You can match sub-system structure with team structure. Mathematically this is an isomorphism. In the original paper, Melvin Conway promoted a homomorphism between team structure and product/service architecture. He did not talk about service architecture, but see above. Difference between isomorphism and homomorphism? Something is isomorphic if the structure is exactly the same. If two subsystems or two functions are very small and it for some reason makes sense to keep them separate, you can ask one team to work on both. Voilà: the isomorphism becomes a homomorphism. Very simple. One team does one sub-system. If the sub-system is too large, make it smaller, BUT fix the interfaces.

The screw can be turned one more notch: Haier, the appliance maker, or rather its CEO Zhang Ruimin has taken an extreme approach to generate sub-system solutions: Micro-enterprises. The internal contracting as principle for coordination can be seen as a (very abstract) API. Simply an API between companies. In the bottom of the article, you will find the statement that complex systems cannot be engineered top down, but that they need to emerge bottom up. We will come to this point in the next chapter.

On the practical side: How should I know in the beginning which structure is the right one? Building teams takes a bit of time and in the end we are dealing with people. We do not want to move people around the organization with a high frequency. Simple solution: Separate the flow organization from the hierarchical organization. In the areas of high uncertainty, it make sense to separate line responsibilities from content responsibilities. If you do that, you can borrow the idea of “Tiger Teams”. Keep the team structure malleable until the solution becomes clear. Then harden the structure to give security to people. Still hierarchical leadership does not need to coincide with technical leadership. It can however. Understanding this concept explains the success of a number of startup compared to teams from corporations. In the startup, you focus on the product and the hierarchy follows. Like the Bauhaus Form follows Function concept. Keep even your hierarchy product centric. Corporations often react differently to challenges.

• Separate line organization from technical organization, i.e. line leadership is different from technical leadership. This causes conflicts between leaders, but this is not presenting a problem, since leadership is “non-value add necessary” at best and the developer produce the value in the organization. The conflict is not where value is generated.
• Match the technical organization to the product architecture. That allows the right people to be in close vicinity (not necessarily in physical proximity, but in terms of functionality.
• Understand that the architects in your organization are in a leadership role. Choose and and educate them wisely. Listen to them and provide them with the necessary power. A seasoned developer may not necessarily be the best architect. Make him or her a senior or “executive” developer. A more junior developer may in fact be a better architect. Architecting things and developing things are two different trades. Sometimes.
• Architecture is more than the documentation of your product. It is defining the products future and modularity and feature roadmap. As a Danish proverb says: “Predictions are very difficult. Especially about the future”, the task is difficult. One solution thus is to keep the architecture as adaptive as possible.

So far so good. As takeaway for now, we have:

1. Understand the product/service.
2. Decide if you need a modular and adaptive architecture or you are better off with a monolithic solution.
3. If you want a modular and adaptive product/service, structure your product or service with focus on modularity.
4. Define and document the architecture. Make sure the architecture welcomes adaptations.

And two more things.

• There is intentional architecture and emergent design. Both work hand in hand.
• A monolithic solution has its benefits, just as modular solutions have their benefits. As always: It depends on the context. The lead architect needs to make a decision. The decision may be right or wrong, but a decision is needed.

Intentional and Emergent Design

Architecture plays at different levels. Above we discussed abstract boxes of functionalities in value streams and boundary diagrams. How boxes are connected at the level of interest is the realm of intentional architecture. An architect understands the functionality of the product or the execution of the workflow and structures the topic. This is what we understand as “intentional architecture“. What happens within the box is in the authority of the team, developing the functionality. On this level, one level lower than the “intended” architecture, we also have an intended architecture. Just one inside the functionality. When we now add feedback or “correction loops” into the system, i.e. we allow the architects and developer from inside the boxes to communicate with the architects defining the system architecture, new ideas and solutions may appear. If they do, new solutions ideas may manifest. This is the realm of emergent design. Emergence means that the system has properties that could not be foreseen in the properties of its constituents. Emergent design results from iterative delivery of constituents of the system we are working to deliver. (See also the HBR article on Haier.) There is no such thing as emergent architecture. In order to control the design of things, architecture needs to be intentional. If architecture just “happens” it may be seen as emergent, but in fact it is just reverse engineering of a solution and trying to justify decisions taken on the fly. Emergent design is a very useful consequence of iterative development. Architecture may change and evolve as the solution develops. There is no contradiction: if architecture is sketched/documented/drawn as the solution is developed, the solution structure is validated with an architectural description. Trust me: you will find flaws right away. It is similar to the statement “If you can’t explain it to a six-year old, you don’t understand it yourself.” (Probably by Einstein.) If your design is not simple, it will not be easy to modify and to extend in the sense of iterative development. Thus, you will automatically kill it after a few weeks latest. Simply BECAUSE you cannot extend the functionality in the sense of iterative development. But, you will only kill it if I insist on interactive development and frequent demos. This is where puzzle pieces fall together and generate a solution. Remember this thing with with agility? Always demo the product. This is the very reason why. If you can demo every week or every other week, you HAVE a modular architecture that welcomes changes. If you can’t demo frequently, I have an idea why… BTW: you can plan a modular architecture. Agility is not a must. It just points you to an adaptive solution.

After discussion architecture in general, let us have a look at possible solutions for easy and cheap adaptability: The API-first approach.

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Good. Let us get started. Two questions are to be answered first:

1. What is a product?
2. What is a viable product?

First things first: What is a product?

For me a product is something that one person creates and some other person uses. It could be something physical that you can touch. It could be something immaterial, such as a service. An idea that I have and somebody else uses, does not count as a product. There are strange situations possible, where one person creates something and nobody is actually using it. O.K. there was an intended user. So more complete would be “something the somebody creates for the intended use by somebody else. That should be good enough. There is no need to be mathematically correct and complete in the definition. The definition is simple and very close to what is found in wikipedia.

The second point is about a “viable product”. What makes a product a viable product? In the biological sense, something viable is able to live and to develop. This is the definition I am going to use. That means, the product needs to have a lifecycle. It needs to be able to develop, change its features and adapt to changes in the environment. It needs to respond to different needs. Worst case, it will perish in case it cannot adapt enough to the changing market requirements. The definition of the death of a product then is related to its use. In case the product is still there, but nobody is actually using it, it needs to be considered “dead”. The mere existence of a product does not make it alive.

Based on these considerations, we have some boundary conditions for our products:

• products are never static. Products adapt to the changing needs of the user or stake holder.
• they fulfill at least a subset of desires expressed by the user. They fulfill at least one job that needs to be delivered by the user or that pleases the user.
• maybe more…

This is an abstract definition of the entity product, however it excludes built-to-order deliverables. Built-to-order jobs in some cases are built on top of a product platform or are just simple configurations of a platform. The trivial example is computer hardware that is “built-to-order”, where you can select RAM size and mass storage space, and maybe the color of the housing. This is “built-to-order” in many cases just to reduce the amount of material in the storage. There might be a yacht that you order, that is built according to your specifications or large truck. Both products are products in a sense that They are built on top of a certain platform, but very customer specific. In case of the yacht, we may enter a pretty unique job at the higher end of the price range.

In most cases, things developed based on a specific order are built on top of something that had been pre-developed and are then adapted. The adaptations may be larger or smaller. that does not matter in principle. The delivered units however do not have a lifecycle. They do not have versions after they went into production. They will not be phased out and replaced with a new version.

Now it should be clear what we discuss when we talk about a “product”. If what you are doing, falls into the category of “built-to-order” items – no matter how big your item is – many things what we are discussing will not directly address your topic, but: Aspects of nearly everything we discuss can be of good use to you, so please stay with us. In an extreme case, your product might be a harbor. It will be built to order. It will be very unique, but it has a lifecycle. You very likely will not build it once and then forget it. It will be extended (hopefully for the owner), maintained, adapted, changed, modified, re-purposed, … . It for sure has a lifecycle like this. In consequence many of the practices and treats I am introducing here will be perfectly useable.

”Stop scaling agility” is the title of this post. Why should I use agility and by the way, what is “agility” at all? And why should I scale it?

Definition of terms continued: “agility”. Many people have tried to define it. There is no definition for a good reason. I believe the best thing is: Follow the agile manifesto. If you do that, then the next topic is also solved. Then there is no need for “scaling agility”. That then makes no sense. Logically. You may need to scale scrum for example. That is correct, but scrum is just a single method. Before now hell breaks loose, check the web page on the agile manifesto and read about the history. There are just principles, no recipes. There is nothing that needs scaling. Period.

Agile methods now mainly reflect on the “New New Product Development Game” article by Takeuchi and Nonaka. No discussion, there the teams need to be small, just like scrum teams for example. To build a large product in reasonable time, you need to have a large team. Here the work of Melvin Conway kicks in. –> with little interaction between the constituents of the system, you can develop a team setup that consists of units with little interaction. Scaling topic solved.

Scaling agility is a big topic and big business nowadays. Agility in its original form is used in teams to collaborate. One of the key elements is communication. Thus in consequence, the team size is limited. To the lower end at doubt three to four individuals. At this size or in even smaller teams communication and alignment is automatically build in. For larger teams, the upper limit may be discussed but lies somewhere between ten and 20 team members. If we want to organize work, delivered by coordinated actions of more people, we embark on so-called agile scaling concepts. These concepts come with more or less formal overhead.

There are commercial and non-commercial solutions available. All have one thing in common: they are more or less complex and involve coordination of different activities. Discussing complexity with system engineers shows that there are elaborated methods to manage complexity. No matter what, all of these methods slow down the value generation. In consequence complexity kills innovation and productivity. The most natural reaction then is to reduce complexity and make things simple: Always strive for simplicity to be fast. Complexity is killing speed.

This does not imply to the keep the problem we are tackling simple. Problems we are solving may be very complex. The solutions however need to be simple for the teams to develop them with high quality and little distraction.

How can we develop something complex and keep it simple for the teams? The answer is in the product, not in the way we orchestrate the project execution.

Focus on

• Architecture
• Loose coupling
• API first principles
• Data orientation

These are the big topics I will be addressing. In this order.

As Hors’d Oeuvre let me focus on the obvious thing: Do we always need agile methods (if you now come with “agile is a mindset, not a method”, please read here.)? My clear answer to that is: NO. And this is the most agile answer you can give. Do what ever gives the best results in the given context to satisfies the customer (and yourself).

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The inverse Conway maneuver

The inverse Conway manoeuvre uses this observation to suggest organizational structures.

“Technology change is driving changing customer preferences and behavior, which in turn are driving organizational change across increasingly software-driven enterprises. The causality question behind Conway’s Law, therefore, is less about how changing software organizations can lead to better software, but rather how companies can best leverage changing technology in order to transform their organizations,”

Bloomberg.

“organizations which radically change their system design should expect changes in communication structure”

Roy van Rijn

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How do we make decisions and which decisions are made where is treated more as a subordinate question that arises from the organizational and operational structure of a company. Accordingly, problems resulting from inadequate decision-making structures and information channels are often only indirectly visible. 

VSM adds a unique approach to addressing organizational problems by concentrating on these decisions and can therefore shed light on a number of problems:

1. Effective Communication and Coordination
   VSM addresses problems related to ineffective communication and coordination within an organization. Its structured approach clarifies roles and responsibilities, ensuring an effective flow of information and quick decision-making, reducing organizational silos.
2. Strategic Decision-Making
   For organizations struggling with decision-making processes, VSM offers a framework that encourages the analysis of data, information flows, and feedback mechanisms. This holistic view helps in identifying potential bottlenecks and forecasting future challenges, leading to more effective and strategic decision-making.
3. Steerable Organizational Structure
   VSM aids organizations in designing structures for effective steering and control. By identifying key systems, subsystems, and their roles. It assists in optimizing processes and resource allocation, balancing autonomy and initiative with alignment to organizational goals.
4. Continuous Learning and Adaptation
   Organizations seeking to foster a culture of continuous learning and adaptation find VSM’s emphasis on feedback loops and information exchange beneficial. This iterative approach allows for performance monitoring and implementation of necessary changes, enhancing adaptability in response to market shifts and technological advancements.
5. Controlled Scaling and Fractal Application
   VSM’s recursive or fractal nature makes it suitable for addressing issues at different organizational levels or abstraction levels. This allows for precise control over the impact of interventions, providing a significant advantage in risk management during change processes.
6. Complexity Management
   VSM’s holistic approach is ideal for organizations struggling with the complexity of their operations. It helps in understanding the interdependencies and interactions between different system components, making it a valuable tool for managing the inherent complexity of organizations.
7. Organizational Resilience
   Organizations facing challenges in adapting to change and surviving in dynamic environments can benefit from VSM. It aids in identifying weaknesses and inefficiencies, thereby enhancing resilience and the ability to respond effectively to external disruptions.
8. Compatibility with Existing Methods
   For organizations struggling to identify blind spots and improve decision-making and communication processes, VSM adds an additional perspective. It integrates well with existing structures, complementing them with its cybernetic tools to make improvement opportunities understandable and actionable.

Key Concepts of VSM

• Cybernetic Nature: At its core, the Viable System Model (VSM) is a cybernetic model, primarily focused on decision-making and steering within complex environments. This framework emphasizes the dynamics of control and communication in organizations.
• Beyond Traditional Org Charts: While VSM relates to organizational structures, it is distinct from conventional organizational charts. It offers a deeper and more dynamic view of organizational functioning.
• Lean Perspective: VSM is compatible with the Lean approach of „value creation first“, encapsulated in the phrase “the system is what it does. 
• Recursive Nature: A hallmark of VSM is its recursive nature. This means that the principles of analysis and design inherent to VSM can be consistently applied across different levels of an organization, with each level addressing its unique challenges and dynamics. Whenever we conduct an analysis or design effort, we decide on the unit that we currently focus on. This unit is called the System-in-Focus.
• Unique Cybernetic Language: VSM introduces a specialized language, a product of its cybernetic roots. This language, although initially unfamiliar, is highly effective in articulating complex organizational concepts and can be surprisingly engaging once understood. For example: the primary value-creating elements or subsystems of the current System-in-Focus are identified as its Systems 1.

Working Principles

VSM offers a distinct approach to managing complexity This creates some common patterns and priorities:

• Local Problem-Solving: In a complex environment, addressing challenges at the local level is often the most effective strategy. This approach allows for rapid response and leverages local knowledge and expertise. From a methodological point of view, it favors enabling and empowering its units, which are referred to as Systems 1.
• Power of Horizontal Collaboration: VSM places significant emphasis on horizontal collaboration and synchronization between different parts of an organization. This method is recognized for its effectiveness, yet it remains underutilized in many organizations. The institutions, people, roles, and artifacts that enable and support horizontal communication are building System 2.
• Role of Management or Higher Authority: As a first option, management favors the units to solve their own problems. Certain conflicts, however, such as those over resources, or issues of compliance, necessitate intervention from a higher authority within the organization. Operational management is referred to as System 3. Like System 2 and the other systems, System 3 can contain institutions, people, roles, and artifacts. Most supporting units like HR, Controlling, etc. are mainly part of System 3
• Future-related Concerns: VSM acknowledges that someone within the organization needs to focus on research, future planning, and strategy. This is System 4.
• Balancing Operations and Future Planning: There is an inherent conflict between managing daily operations and preparing for the future. This conflict, while challenging, can be productive if properly moderated. This moderation is done by System 5 by identifying the „North Star“ or the principal direction of the System-in-Focus and acting on it. System 5 decides as the final authority in conflicts.

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“While we must acknowledge emergence in design and system development, a little planning can avoid much waste.”

The architecture of a system must support the ability to provide frequent, independent releases to meet business objectives. In addition, the architecture must be easily adaptable to strategy changes. This is achieved by evolutionary design and a combination of both intentional and emergent architecture. Architects will spend less time defining ‘intentional’, big-upfront architecture and more time with constantly assessing incoming use cases to evaluate their potential impact on the current design.

Safety Advice
As with many analogies that are being applied to the digital world the Architecture analogy is one that is being misused the most. A construction architect would work mostly on the usage and the appearance of the building. So in comparison this would be a UX Engineer. What we mean with Software Architecture are Construction Engineers. A Software architecture has by its nature a dynamic construction that needs constant refinement. Thus the major focus is to identify the parts that are becoming to stiff and brittle over time. Software Architects should thus act more like Gardeners than Construction Engineers.

Related

• Portfolio strategy

Recommended Resources

1. “Agile Architecture” – Molly Dishman & Martin Fowler Keynote
2. How enterprise agility will redefine architecture by Jeremy Drumm

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“The glue that holds all relationships together–including the relationship between the leader and the led–is trust, and trust is based on integrity.”

Trust in the workplace has a big impact on how employees work together and how organization-wide learning takes place.

Feedback serves as a catalyst for learning, about yourself, about customer needs and about our ways of working. But this can only be nurtured through a permissive environment where people feel safe to open up.

Safety Advice
Employees trust their peers more than their senior managers and executives. The higher you are in the hierarchy, the more critical and difficult it is for you to build trust with those you supervise. As a leader you cultivate trust by providing clear direction, giving people what they need to follow through, and then getting out of their way. And don’t forget – trust is something that is given to you.

Related

• Shared principles and values
• Participation and communication

Recommended Resources

1. Tales of Creativity and Play

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“The real battle is not competitors. This is rubbish, very abstract. When do we meet competitors to fight them? The real battle is against ourselves, against our bureaucracy, our complicatedness – only you fight it.”

The behavioral capabilities of an adaptive organization needs to be underpinned by appropriate organizational structures, boundaries and processes. If people and structures are not aligned, the result would be an unconstructive culture. Clear roles and responsibilities reduce redundant work, accelerate decision-making, and promote ownership. Process discipline ensures focus, reduces coordination efforts, and improves information flow for decision-making.

Safety Advice
Structure doesn’t only allow an organization to run smoothly; it also helps prescribe how and organization runs. In fact, organizational structure can help dictate culture, values, and success.
Command-and control-structures worked well in the industrial age. The age of information economy requires structures which facilitate the flow of information, and, thus, maximizing efficiency through keeping the employees engaged and enabled to think, communicate, and work at their best.
Leaders must be willing must to critically assess whether their company’s structure aligns with its values and goals. This form of big-picture internal assessment often goes overlooked.

Related

• Identity
• People and culture

Recommended Resources

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“Whenever there is a product for the customer, there is a value stream. The challenge lies in seeing it.

In Flow-oriented organization design we learn how to setup the company from an outside-in perspective around the ultimate goal to create value for customers.

Most organizations are structured vertically, yet adaptive organizations require more horizontal and process-oriented structures. We have to identify value from the customer standpoint, organize around value streams to fulfil that value, establish flow and implement pull. That involves bringing together all required business and technical capabilities needed to define, implement, verify, deploy, release and maintain solutions for customers.

Safety Advice

Most travelers still think that division of work by functional specialization will remain the right approach to scale product development in the future. Unfortunately, that only provides competitive advantage when efficiency by synergies are the goal but not when speed and adaptability are of primary concern. Misjudging your current situation and context can lead to dramatic suboptimization and complete failure.

Related

• Structures, processes and workflows
• Enabling architecture
• Situational Awareness

Recommended Resources

1. Flight Level Model for designing value stream oriented organizations and for achieving Business Agility

The post Flow oriented organization design appeared first on Grado.

Every company has two organizational structures: The formal one is written on the charts; the other is the everyday relationship of the men and women in the organization.

Structure is essential to the functioning of any organization. It is anything that creates boundaries and rules to orchestrate people and activities. Structure includes organization structures, policies, governance practices, and reporting relationships for people to align toward a common purpose.

An adaptive organization needs the capability to smoothly adapt its structures in response to changes in its business environment.

Safety Advice
The design of the organization defines the outcomes or as W. Edwards Deming put it, “Every system is perfectly designed to get the results it gets.” You cannot expect different outcomes as long as the structure won’t support it.

Related

• Flow oriented organizational design
• Structures, processes, and workflows
• Environment of trust and learning
• Enabling architecture

Recommended Resources

1. Structural Agility by Jardena London

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What are Adaptive Organizations

Foto: Ian Turnell von Pexels

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