Software solutions often go awry. The underlying reason is not technology, but poor management. Partial optimisation as well as divide and conquer strategy, will lead to fragmentation of activities and inevitably to an increase in bureaucracy. Each employee is given strictly defined role descriptions, which are also narrow, because otherwise they cannot be defined with sufficient precision. This leads to a huge increase in the need for coordination, as the work must be coordinated between several narrow-ranging roles, and at the same time working together becomes more difficult.
Consulting firm Gosei’s co-founders Ran Nyman and Ari Tikka believe that large organisations are characterized by analytical leadership, despite the need for systemic leadership. Analytical problem solving leads to partial optimisation, but it does not improve the capabilities of the entire organisation.
As your business grows, fragmentation and bureaucracy increases, and this will inescapably lead to coordination chaos. In the N4S program, Gosei has identified the most important organisational casting defects, and it is necessary to learn from them. These faulty models combine the abstract and soft management approach to the hard management logic of practical work.
Ari Tikka thinks that the lean & agile culture is often visible within the software companies’ performance and project work, but within the planning and management of the organisation it is seen less frequently.
“Bureaucracy is the inevitable outcome of fragmentation. An army of general managers are set up to solve various types of problems that permeate through the entire product, and these managers then add their own semi-finished and often impossible development projects in the work load. I have also seen how disappointing it is for the software designers, when they cannot see the customer, or the whole picture.”
When an organisation enters coordination chaos, Ari Tikka and Ran Nyman think that the only way out of the chaos is a new kind of leadership, which they call Actionable Fearless Leadership.
"Fearless Leadership means daring to accept feedback and criticism, and then learning from it. Fearless leader is curious and willing to learn, and is not afraid of conflicts. Fearless leadership builds feedback mechanisms for the organisation, from the customer, from the product, as well as the organisation itself. Those are the foundations of an agile and developing organisation." Tikka emphasizes.
Lean Startup Principles to Improve the Internal Functioning
Gosei has consulted various software companies in the application of lean startup principles, specially to improve the internal functioning of organisations.
"Gosei’s work at N4S began with developing the Go & See Change Management method in 2013 with Bittium, amongst others. Go & See will create a systematic experimentation culture like Lean Startup, for internal performance development. “
The starting point for Lean Startup is to boldly experiment with different options together with the customer, already at an early stage. At the same time, you will also learn from mistakes, so making the necessary changes is quick. The experiment is done as quickly and affordably as possible, using demos and prototypes. This will also minimize costs and risks.
"Go & See is based on experimentation. Experimentation verifies whether the measures solve the customer's problem while creating new energy. The customer is then the user or utiliser of the internal operation method. Experiments are designed to build know-how or to debunk basic assumptions associated with the problem. This is done systematically and scientifically."
Tikka believes that systematic research is an essential prerequisite for increasing the depth of knowledge, because we all know how to "experiment a little"
Gosei started Go & See-based method development with Bittium, and the hypotheses were tested with internal customers. Per Bittium’s report, the trial culture clearly resulted in growth of customer satisfaction, observed in 2013-2015.
What Goes Wrong in Large Software Organisations?
The founders of Gosei have been involved in the development of the Large-Scale Scrum (LeSS) framework since 2005, when they were still working at Nokia. The main architects at LeSS Craig Larman and Bas Vodde were involved in changing Nokia Networks into an agile organisation. Vodde was also on Nokia’s payroll in Finland and in China for several years.
“LeSS framework is minimalist. It provides critical advice to organisations, so that they can start developing their operations. It is important to note that the framework rules fit on three A4-sized sheets of paper when written out. This allows management innovations for organisations, because inside the LeSS rules there is a lot of freedom to operate. LeSS also defines ten guiding principles, and following them enables comprehensive organisational development. In addition to this, LeSS presents 600 pilot models, which have been tested in the past ten years. They can be used as an example and inspiration for your own organisational development projects", says Ran Nyman.
LeSS aims changing an organisation profoundly, and not only eliminating the symptoms. LeSS promotes Customer-centric Learning, which is the only way to avoid and correct fragmentation in Ari Tikka’s opinion.
"The key result of our study is, that role and task specialisation inevitably gives rise to a fragmented organisation, thick bureaucracy and waterfall process. LeSS is the only framework aimed at the agility of a large organisation, which considers the avoidance of fragmentation already in the organisation's planning phase. Over the years, numerous designs have been created, like project models and matrix organisations, which eliminate the symptoms locally or provide better coordination for a fragmented organisation."
In the N4S program Gosei has researched and published results of what goes wrong in large software organisations.
"After the departure from Nokia, we have identified fragmentation in almost every organisation that we have worked for. Organisations do not recognize the phenomenon and are blind to its effects. People downplay the matter, reasoning that fragmentation is everywhere and in every organisation, and that we cannot do anything about it."
According to Tikka one feature of a functioning organisation is that it is constantly and rapidly integrating technology, policies, people and knowledge. Unfortunately, greed and ignorance destroy such an integration.
Instead of creating multi-disciplinary teams, companies continue to organise their projects bureaucratically.
“Testers and coders are in different departments, and they have different line managers. Android, Web, Databases, Customer Relationships and Business Logic are all separate teams. If the teams specialise in technologies, that will surely lead to process specialisation too, which creates a traditional waterfall process. This is reflected in strong silos - and thorough planning in advance."
“Multi expert teams, who have the authorisation, can carry out the job at once. There are no queues and feedback is immediate. Customer oriented learning is productive and in fact, the organisation's activities are based on it.”
Tikka believes that the fragmentation of knowledge work is modern Taylorism. At the beginning of the 20th century Frederic Taylor created so called Scientific Management and the basic idea was that job performances should be tracked and measured accurately, so that supervisors could develop new working methods based on these findings. Unnecessary proceedings were withdrawn and work rate was increased continuously. The result was often that the work was cut up into small sections and only a few people, if anyone, saw the whole picture.
In today's world, organisations cannot succeed with Taylor's style, says Tikka.
"Know-how must be extended so that the team, which implements the customer-oriented entity (feature), learns to carry out the functions related to the feature also in other components. In which case, the component specialist team provides knowledge instead of service. Multi expert teams, who have the authorisation, can carry out the job at once. There are no queues and feedback is immediate. Customer oriented learning is productive and in fact, the organisation's activities are based on it.”
Gosei has identified the key organisational casting defects that lead to a slowdown and even fall of a software organisation.
When the principle of management is specialisation into a task or a role, along with growth there will be a massive need for coordination. Coordination is of course, done by specialised coordinators, project managers. At some point, coordination is no longer working and business stalls.
Within a fragmented organisation, employees are divided into strict and narrow roles. Each employee has their plot and performs their given duty. If you need changes or service from elsewhere, you put a service request in the queue and it will be actualised one day. Therefore, the organisation is full of service queues that are always blocked. Everyone is busy taking care of their own plot, and perceiving the whole picture is very laborious. That is why learning is limited, it is focused at one's own plot, and it is therefore less productive. Managers coordinate problems, in other words, they take care of their own narrow role. The power and wisdom is always elsewhere.
Managing with Fear
Managing with fear is a feature of fragmented system. If you do not know what is happening at the neighbours’, it will cause paranoia. If the director does not know what is happening on the factory floor, there is only one management tool left: pressure. In a fragmented organisation, "Power and wisdom are always elsewhere."
The Growth of Bureaucracy
An organisation, which specialises in the role and task, needs middle management to lead the work and develop fragmented roles. Middle management is negotiating agreements with senior management, employees, and other middle management. This works economically only when the organisation becomes a machine of rules, a bureaucracy. Unfortunately, bureaucracy is not able to recognise and manage value, but only to monitor the process.
This is often related to the customers and users distancing from the software designers. Bureaucracy adds to the blocked work queues of the coordination chaos.
The Inevitable Birth of the Waterfall Process
Specialising in technology (components) inevitably leads to a waterfall process. When you need a new feature, which team does it? You need a planning team to pre-process the work. Who coordinates? You need a project manager. There will be quality problems, so you need a quality manager. Which component team integrates and tests the package? You assemble an integration and system testing team. The teams are loaded unevenly, so you need work queues for teams. Work queues are coordinated with traditional resource management for projects. In addition, such organisations tend to grow out of control, when new employees are hired for the momentary bottle necks.