Is Agile for every company?

Agile has been, for more or less 20 years, the de-facto project delivery method in Finland within the information sector bubble. The methodology and sharing the outcomes in public github accounts are even built-in to public sector contract templates. Any organization having an in-house development team is probably running their team with either Scrum or Kanban and the insignificant minority who use waterfall projects, have at least taken a glimpse to see if the grass is greener on the other side.

Based on the previous, you’d naturally expect that the organizations would have an agile mindset outside their project as well, right? But  for many organizations that seems to have been a pill too large to swallow.

For many companies, all acknowledged best practices in software development, such as incremental development, autonomy, collaboration, seem to be worth nothing outside the project scope. It reminds me of one of my old customers who bluntly told me that we can be as agile as we wanted amongst ourselves, but he’d be only paying for a fixed price-scope-and-schedule project (I’m pretty sure we eventually ended up doing agile T&M together). The management’s perspective often seems to be that agile works best as long as it does not apply to them.

Things are a bit better in the consultancy world. Instead of going all-in into traditional management, there’s a lot of variation. Typically the main differences between companies are the amount of self-management and transparency. An organization might claim to be flat, but it does not mean it is transparent or that there aren’t hidden incentives for the bosses. 

I myself work as the CEO of Druid, a Finnish software company specializing in enterprise content management projects. The company was founded ten years ago by five software engineers. None of the founders was experienced in running a company, but they had a firm idea that things could be done better.

What made Druid different from the places I had worked earlier was that the founders were keen fans of agile and lean methods and applied as many of those principles to running the company as possible. This was more due to lack of knowing better than a purposeful choice, but nevertheless it worked out perfectly.

When I joined the company a few years after it was founded, I was greeted by a culture that focused on learning from mistakes, trying new things and generally thinking that the sky actually was the limit. All the founders were still working in the company. Druid had become a family of a sort and being one was actually one of the core values of the founders.

The organization was developed iteratively. We tried many things out and either dismissed them after a while, or kept the innovations and built new processes on top of them. Once in a while we tore everything apart and tried something totally different.

In the autumn of 2020 I learned about Teal organizations. At the time we had been working remotely for the past six months and started building a fully remote organization. This generated pressure to switch the management paradigm to something that better supported autonomy and at the same time would take us culturally to the next level.

Our implementation was pretty straightforward: I, as the CEO, decided to give up my power to dictate how things should be done and instead we made it a rule that anybody can make any decision as long as they seek advice from the group of people the decision affects and any subject experts they can find. 

Recurring themes, such as employee health and happiness, sales, resourcing and training would be handled by a group of motivated people. We called these groups swarms. The swarms would be listed somewhere publicly so anyone could see what is going on in the company and would be allowed to join the swarms. This increases transparency since no decisions – at least in theory – would be made behind closed doors.

In addition to the advice process and swarms, there’s the matter of compensation. Salary transparency is somewhat of an obligation in a self managed organization and ideally everyone would just decide their own salary. Obviously this is easier said than done.

We decided to set up two swarms to manage  the compensation. The Budgeting swarm to decide how much money we could hand out, and the Salary Week swarm, who would then decide during one week annually who gets a raise and who does not. 

The Salary Week swarm would start their work around one month before the salary week happens by informing everyone of the schedule and setting up the information gathering phase. They would then gather information of everyone’s performance, current compensation and peer feedback. This information would then be discussed with the person during the salary week. At the end of the week, the swarm would review all the information and make the final decision about the annual raises.

The first salary week was not the shitstorm I subconsciously expected it to be. The process went well from my perspective and I believe everyone thought it to be fair. And compared to the old process of raises being decided behind closed doors and based mainly on the asker’s negotiation skills, this was a huge leap forward.

Did Teal work for us in the long term? Today, after living the Teal-life for two years, I have some idea of what worked, and why some of the things did not work for us.

Our biggest drawback regarding the “Teal transformation” was that there were very few freedoms that we could give our employees, but there were a lot of obligations that they should start taking care of and the total responsibility of any decision they made.  Now instead of asking mum and dad for permission, everyone needed to make the decision by themselves based on the information available – and bear the responsibility.

I’m confident that if we had been a total sweatshop, things would’ve been easier as the freedoms and responsibilities could have been handed out hand in hand. 

So it was a bit difficult to sell the “taking the responsibility” part of the Teal to everyone and that’s understandable – many experts are totally happy doing what they do best. And they do know that if they want to improve something, they can do it themselves when needed. 

On the other hand, there were a lot of people who stepped up and started committing: decision making, invoicing, budgeting, salaries and obviously putting together company parties.  

There were also many other things that worked out really well. The transparency forced us to start proper budgeting and make the numbers available to everyone – we go over our cash and sales situation in detail every month and if someone wants an update in between, we’re happy to do it. 

Transparency is something that needs constant attention and improvement. It’s not just about making the numbers available, but promoting the information and formatting it in a way everyone can understand it.

We had to document a ton of processes to enable people to work autonomously. As a result, we are more resilient, everyone is more independent and the “management” workload has gone down a lot because there is a lot less pampering and paperwork. Our culture is more open for people to take initiative and “getting shit done” and this can be seen in our everyday life.

One of the major personal learnings is that Teal is not the total absence of management in the same way that using agile development methods is not a total absence of project management or documentation. The management still happens, it’s just not the “managers” who’re doing it anymore.

I’m not sure if there’s an exact and complete definition of a fully Teal organization, but obviously Druid is not there yet. It will be a long term project and for me, the most important thing is the desire for constant improvement and the lessons we learn during our journey. 

About Mikko Hamalainen 1 Article
Mikko Hämäinen is the CEO of Druid, a Finnish software company. He has a 20 year background in the software business and has worked the past 10 years in business development and creating an agile organization. He is an advocate of agility and self management and has a passion for lifelong learning.

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