Lean Management
how and why to build lean management teams
The role of a professional manager is relatively new in the history of work; until just over 100 years ago, work roles were divided in to “workers” and “owners”. Around the turn of the last century, coinciding with the creation of large scale industrial corporations and a shift from manufacturing to services, the role of a “professional manager” has evolved to an aspirational job function, that which every working individual should aspire to. But with the advent of modern, digital-economy manufacturing techniques, is the function of management still relevant?
What do Managers really do?
Most managers today:
· manage available budget and resources (to exercise control)
· make hiring, firing and disciplinary decisions
· make product design & direction decisions
· determine what constitutes “acceptable” process & standards
· shield their team from external drama and politics
· deliver the “casting vote” in contentious situations (upwards escalation and “decision-making”)
· take responsibility for delivery, and consequently for when things go wrong
· motivate and empower a team to collaborate
In short, managing people is primarily an assertion of control in order to achieve a more successful outcome for an organisation.
“If all personnel always did what was best for the organization, control — and even management — would not be needed. But, obviously individuals are sometimes unable or unwilling to act in the organization’s best interest, and a set of controls must be implemented to guard against undesirable behavior and to encourage desirable actions”.
And this fundamental concept is the cornerstone of a multi-billion dollar army of industries. From conferences, management consulting companies and around one million books published on the topic, there are many spoons in this particular pot.
The practice of management by control came in to the fore in the mid-1960’s, as a result of the evolution of management by accounting-based controls, leading to a new lexicon of’ “right-sizing’, ‘business process re-engineering’, ‘outsourcing’ “best-process” and ‘value chain analysis’. Every couple of years a new variation on the theme has become la mode, from Six Sigma theory, CMMI, or (in the technical arena) other such “command and control” techniques such as PMI & PRINCE 2.
Is management control an illusion?
The idea that an accounting based approach to management is actually successful is sadly quite far from reality. In most cases, we know both intuitively and empirically that one size does not fit all and that objective metrics are rarely captured and used in decision-making let alone to determine management best practice. If scientific management theory were truly applied (i.e. the practice of experimentation & learning from results), after 50 years of empirical data, most organisations would clearly be much closer to a common level of success. The management industry as a whole has almost no published metrics available to prove or disprove that a control based management style is genuinely effective.
Moreover, very few employees would argue that management by control is an effective contributor towards achieving successful outcomes or (in software engineering circles) to the ultimate creation of value. Evidence of this can be found by looking at practice: “management” responsibilities of hiring new team members, identifying and asserting delivery standards, reaching decisions on contentious topics and taking responsibility for a team’s achievements very rarely are achieved “top down”. Most successful managers know to defer such decisions to the experience, skill and knowledge of the teams they are managing. Particularly in technology, the first thing to be sacrificed when a person becomes a manager is the maintenance of his/her current technical knowledge and so his/her ability to best make technical decisions. Classical management theory at best imposes a bottleneck on to critical decision making and output.
In so far as managing budget is concerned, traditional management theory is also self-challenged. Not only is this a control-function by definition, but the approach of classical management theory presupposes that known needs can be met with known solutions and known resources. Particularly in software engineering but also any organisation that is creating new solutions, we know so well from experience that neither the inputs, outputs or route are either known predictable. And certainly, these solutions are generated “bottom-up”, and merely collected (often under considerable stress) by the manager. (This topic is explored in our recent post on why is software effort estimation so difficult?).
So what about the responsibility of management to “shield the team”? When so many decisions are in fact made by the team itself (albeit ratified by management), the act of restricting information available to the team to make decisions is fundamentally counter-productive. Classical management theory advances a hierarchical, multi-manager model of control but assumes rational decision making (by all) to serve the interests of the organisation. This is problematic because the hierarchical nature of classical management is not a positive-sum game (where every participant is incentivised to co-operate by only serving the needs of the organisation); in fact it is more akin to a extreme form of the prisoner’s dilemma game.
And how well do traditional managers serve as motivators, empowering a team to collaborate? As so much of classical management theory is about asserting control over a team, it seems somewhat paradoxical for management theory to then advocate (re)empowering people as a means to improving outcomes. Such “top-down” mandated collaboration is somewhat of an oxymoron; (particularly in software development) collaboration cannot be forced upon a team; it can only be prevented.
Is innovation really important to your organisation?
Amongst growing companies, the need for a culture of continuous innovation collides with the need for oversight and control. Most large organisations today have sacrificed the creative culture of innovation, the search for new strategy, instead focusing on improving the execution of (“top-down”) strategy. Consequently, many organisations have a dysfunctional relationship with innovators. Whilst the idea of fast-moving disruptive employees focused on exploring new markets is appealing, corporate culture rarely rewards such behaviour and often rejects those who bring it as cultural misfits. As we have seen, traditional management theory is designed to control “ disruptive” behaviour. Commonly it demands justification of investment with what are in fact unknown outcomes, tieing effort to results (rather than learning), asserting hard (calendar) deadlines on to initiatives, and so on. Classic management techniques are often counter-innovative by design.
What happens if we do away with management altogether?
Self-managing teams and even self-leading teams have been successfully achieved since the 1980’s, yet little traction has been made in comparing this against classical management theory.
Despite this, there are growing lean management and “#nomanagers” movements, particularly prevalent in the start-up community, which advocate a range of management theory change, up to and (sometimes even) including doing away with traditional managers altogether. In lean management, every employee has the opportunity to lead, has the opportunity to determine whether he/she is creating the right product or service, rather than just whether he/she is building the product or service right. Each individual is valued and empowered to freely expand the organisation in any direction that creates value for its customers. Instead of managers, a company hires (and empowers) people who can direct their own tasks and produce, rather than oversee and manager other people’s work.
In such organisations, trust and commitment are used to empower every member of the company. The company is structured in a meritocracy of organised cliques of labour, working collaboratively to define and realise goals.
In cases where these techniques have been employed, the consequences on both workers and organisations is immense. Increased job satisfaction, job security, work-life balance, employee retention, motivation, improved efficiency and transparency are all reported by executives and workers inside such organisations. Management ceases to be such a bottleneck in the creative and delivery processes. Companies implementing lean management consistently report record sales, innovation and increased customer satisfaction.
What are the challenges involved with adopting lean management?
Worker to Owner level communication. Senior managers (Executives, Directors) have to learn new skills to be able to communicate vision and translate back product / service outcomes in to shareholder value. Without managers to interpret, they need to learn to be able to context switch more effectively and get much closer to their operational talent. In some cases this can be managed by a highly competent project management office, but there’s also no substitute for an executive knowing the nuts and bolts of his business operation.
Cultural change. Success metrics need to become more sophisticated and the practice of management often has to become more objective and data driven. Success can no longer be defined by the number of reports but about the value created, even where this value is not immediately (or directly) translatable in to quarterly profit. Middle managers have to redefine their focus on to that which creates value for the company and then learn to stay out of the way, resisting the urge to micromanage. Organisational lexicon needs to change: rather than projects and resources, we are interested in products and people.
Confidence in change. Re-engineering the culture of an organisation or department towards a meritocratic, lean, self-organising unit is a significant undertaking; one which requires vision, commitment and self-belief. It requires not only a degree of trust in people, but also incredible leadership and communication skills. Redefining the definition of success away from people and their goals, towards purpose, vision and value, allowing teams to define and realise their own goals is a step to be taken with commitment. Whilst a roadmap to change is necessary to devolve decision-making, lean management can’t be implemented without conviction and commitment at every level.
Baseline the operation. Iterative, rhythmic delivery cycles where feedback is available is a mandatory step to devolving management responsibility and implementing lean management. Teams can only self-manage when given the necessary empowerment and information about the results of their efforts, as well as empowerment to determine the focus of future efforts.
Team dynamics. It is necessary to ensure that the team is able to cope with the increased demand for flexibility, communication, initiative, collaboration & integrity. Large (perhaps outsourced) teams of generalists, carrying out manual, repetitive tasks with little or no accountability to the organisation have to go. So, offshore commoditised services are out, niche teams of specialists and a culture of peer leadership are in.
Remuneration. If you want high performing, communicative, creative people who are willing to take responsibility for the team’s outcomes, you have to pay for those people. Reducing your management size is an organisational value creation exercise, not a cost cutting one.
Case Study: Management at Google, the case for data-driven leadership
In 2002, Google experimented with a completely flat organisation in order to maximise rapid innovation. They quickly realised that management also brought value by communicating strategy, aiding prioritisation, providing a release-valve and directionally coaching people.
Today, Google has 37,000 employees but just 5,000 managers, 1,000 directors and 100 vice presidents. It is not atypical for a manager to have 30 direct reports; such a structure is designed to prevent micromanagement. Such a culture protects the right for anyone with a sufficiently well supported business case to propose not just product but also organisational change within the company. It fosters respect for technologists, initiative, flexibility and communication.
“Engineers hate being micromanaged on the technical side, but they love being closely managed on the career side.”
Eric Clayberg, Google.
In 2009 Google launched Project Oxygen, a programme to measure the effectiveness of key management behaviours and to ensure that managers matter. Using data-driven decision making techniques, the project sought to pinpoint specific, measurable behaviours that contribute to the success of the organisation. Using double-blind qualitative interviews, direct questioning uncovered eight behaviours shared by high-scoring managers, evidenced by solid data. These behaviours were used as a foundation for designing upward feedback surveys on managers, a range of management training courses, and coaching to ensure managers are more effective:
Google’s eight management behaviours:
- Is a good coach
- Empowers the team and does not micromanage
- Expresses interest in and concern for team members’ success and personal well-being
- Is productive and results-oriented
- Is a good communicator—listens and shares information
- Helps with career development
- Has a clear vision and strategy for the team
- Has key technical skills that help him or her advise the team
What’s interesting to note is that none of these could be deemed control functions.
Let’s talk about Holacracy
Holacracy is a new theory of corporate structure that focuses on getting things done. It focuses on minimal or no management, humanisation of engagement, communication & accountability. The Holacracy constitution is published under creative commons licence. (think: Agile Manifesto).
“The difference between Holacracy and traditional management is that when you have people at the bottom and people at the top, it’s always the people at the top trying to figure out their tensions, then they have the people at the bottom resolve them. No one takes into account the tensions, ideas, issues felt by the people at the bottom. [The people at the bottom] spend their days resolving tensions they don’t have and may not even understand.”
Jason Stirman, Medium.
Medium, (the blogging platform you’re reading this on right now), has embraced Holacracy with open arms. They advocate a strong culture of paying attention to problems, airing employee tensions, whether these are work or personal, doing so provides a route to releasing conflict and removing the barriers to collaboration.
Here are some of the key values that Medium incorporates in to its culture:
· No people managers. Maximum autonomy.
· Organic expansion. When a job gets too big, hire another person.
· Tension resolution. Identify issues people are facing, write them down, and resolve them systematically.
· Make everything explicit — from vacation policies to decision makers in each area.
· Distribute decision-making power and discourage consensus seeking.
· Eliminate all the extraneous factors that worry people so they can focus on work.
Yet even at Medium there is a hierarchical structure of sorts. The overall organisation’s purpose, its vision statement, is defined within the concept of an anchor circle containing nested sub-circles; each sub-circle has it’s own purpose, and is steered by a team with accountability. The key difference here is that the structure is lean, each team making decisions based on validated feedback, and is committed (and connected) to the overall company purpose rather than a team manager’s determination of goals. As a company vision changes over time, changes flow down to all circles and teams naturally, without the need for a manager. Authority is devolved, and yet overall accountability to the organisation is maintained.
Specialists are trained in facilitating meetings to ensure that all tensions are aired (stand-ups, anyone?) and addressed. Decisions are made within an incremental and iterative environment so that teams can receive feedback and don’t need to context switch from detailed decisions to the “big-picture” constantly.
“I started looking at management like a big A/B test, with a goal of making more data and results-driven decisions”
Jason Stirman, Medium.
How does lean management scale to large organisations?
Large organisations typically have deeply embedded organisational structures based on traditional, hierarchical management theory. How can lean management scale to large organisational structures?
“Often with small groups, it is not the manager who emerges as the leader. In many cases it is a subordinate member with specific talents who leads the group in a certain direction. Leaders must let vision, strategies, goals, and values be the guide-post for action and behavior, rather than attempting to control others.” Daniel F. Predpall
We can see that lean management focuses on the smallest possible work units producing value and yet provides for collaborative, self-managing teams, working towards a common vision. We can also see that is is possible to nest such teams and visions infinitely, directly tying an overall organisational vision to every team, without needing managers to directly command change or control behaviour. Whilst lean management is critical for facilitation, enablement, providing feedback and managing careers, it is not required to determine deliverables, approve activities, ratify standards & process, or enable a team to propose changes within the organisation.
From that perspective, lean management is infinitely more scalable than traditional accounting based management, as can be seen within organisations such as Github, Google, Medium, Valve, and hundreds of others.
Conclusion
Lean management doesn’t simply mean removing all managers from an organisation and hoping for the best. It means engaging with people in a way that makes them accountable, collaborative and above all inspired to use initiative to solve their own problems. It means evolving traditional management responsibilities from command and control functions to facilitation, enabling successful performance mainly by unlocking the potential of people.
To become more successful in this new world, managers trained in classical management theory need to transition their skills from classical accounting-based management techniques to establishing iterative, meritocratic environments, devolving responsibility, and then setting the stage. Managers increasingly need to learn to catalyse without controlling, focus on giving feedback and facilitate problem management in a consistent way without seizing authority.
Adopting a lean approach to management is increasingly critical to ensure competitive success in today’s corporate landscape, where fast-moving, meritocratic start-ups, free from the shackles of traditional management theory are creating value with lightning pace and agility.
Farid Tejani is a Partner at Ampersand, a boutique strategy and management consultancy specialising in sustainability, emerging technology and product innovation.
