Agile at ConsenSys: An Operating Model for Decentralized Organizations

Agile is not just a way to manage projects, but an infrastructure for an organization to effectively operate in a rapidly evolving industry.

Agile Methodology has been around since 2001. It’s evolved from a software development process to a business culture and become the predominant operating model for high-performing organizations like Amazon, Netflix, Riot Games and Google. Agile is not just a way to manage projects, but a way to distribute greater autonomy to the teams that are closest to the customer — and large organizations are starting to notice. At ConsenSys, we use Agile as an infrastructure for the decentralization of our organization.

Why Decentralize with Agile?

As organizations strive to achieve greater and greater heights of innovation and speed, they experiment with new organizational models that give more autonomy to the teams closest to their customers. This allows the organizations to iterate faster on their products and achieve more in less time.

But as organizations transition to these models, the chaos and ambiguity that are inherent in the process of decentralization also increase. We need to replace our traditional hierarchy and bureaucracy with something — And Agile is that something.

Agile is the last known operating model paving the way for decentralization. In the age of decentralization, we are left with more uncertainty than we can handle. One of the last known things to have worked in this environment of chaos and ambiguity is Agile. Agile is the perfect infrastructure for this decentralization because it teaches experimentation, service-based leadership, and a focus on the basics.

Empiricalism: Always iterate & experiment

Since its origin, Agile has been addressing chaos and ambiguity with an experimentation model called empricalism. The underpinning of Agile is the idea that software (and now most things in business) have become so complex and fast-moving that you cannot predict, plan or know how things will play out. Therefore, the only way to move forward is in small chunks — what Agile calls an increment. Then, based on findings and learnings, you iteratively improve and move forward again in another small increment.

The way this works is in practice is that a Product Owner creates a list of what they think the user wants/needs (aka hypothesis for an experiment) and produces a Product Backlog. Then the team takes an increment of that backlog and breaks it down into a series of “epics,” “user stories” and tasks to be used as a plan for the next week, two weeks or month (aka “sprint”). This sprint is called such because it’s a small enough increment that you can quickly move forward before or while things change. Then when the Sprint is complete, the team incorporates any external changes and re-plans accordingly. This happens over and over until the product is ready to go to market.

In n the past several years, the Agile methodology has evolved to where the focus is on “co-developing” the product with the customer. In other words, getting feedback and data on customer needs, wants and behaviors and getting the product in front of the customer early and often.

Agile’s way of incrementally and iteratively moving forward towards discovering what works for the customer and product development team has been a tried and true model for operating in chaos and ambiguity. It provides relief from the cognitive dissonance of planning and replanning as the business and organizational landscape rapidly changes. It’s also what enables decentralized organizations to operate with speed- without it, we’d be mired in endless plans, meetings and discussions.

Servant Leadership: If the team fails, the leader fails

The other defining aspect of decentralization is the removal of organizational hierarchy. This seems understandable and desirable, at least conceptually but very difficult to adopt in practice. It exponentially adds chaos and ambiguity because there’s no authority. No one who’s setting the direction, setting the vision or holding the standards of performance. Because most of us grew up in a hierarchical structure, it’s hard to understand the ramifications. Even for those who are recognized as “senior leaders,” without clear lines of authority or responsibility, it is challenging to understand, let alone navigate.

Because I was in consulting, I always had a client, a person who signed the checks from whom I took direction. But what’s unique about decentralization is that this person isn’t there. You’re responsible to everyone in the organization which has the effect of being responsible to no one. After living this for days, weeks and months, you realize that you are responsible to someone — yourself. Your own standards, your own vision, your own direction. And this is where Agile again provides the path forward. It was agile that first made the shift from command and control to empowerment and ownership of the team. The team was accountable and each individual was responsible for his or her contribution.

And it’s still Agile that provides the last known operating model. Agile works within an organization without hierarchy but also provides its own “nested hierarchy.” It’s not so much a hierarchy but rather “servant leaders” who are there to support the team’s efforts because they are team members too. Servant leaders have skin in the game; if the team succeeds, they succeed. But if the team fails, they fail.

The successful teams at Consensys simultaneously aim for decentralized leadership while also accepting and embracing the servant leader roles of Agile. Because without it, teams are left searching for unanimous agreement on vision, mission and priorities.

ShuHaRi: Walk Before You Run

It’s this operating model of Agile, with its servant leaders where decentralized organizations will quickly find a safe path forward. It’s from this foundation, that we will evolve through increments and iterations to a truly decentralized organization. Agile also advocates “walk before you run,” an idea referred to as ShuHaRi. Translated, it means to adhere to tradition, then innovate and then transcend.

The lesson here is that like many Agile teams that want to customize (innovate) the methodology for themselves before they understand how to effectively apply the fundamentals, decentralization offers an opportunity for the same overzealousness. In any team, try the basics first and understand them before you iterate.

Because Agile has earned its reputation as a model for high-performing organizations over the last 17 years, it’s a known, solid stepping stone on our journey to transcending Agile into organization-wide decentralization.

The Path To Success in Decentralization

Agile is a known and proven model for operating at speed in a chaotic and ambiguous environment. While decentralized organizations like ConsenSys aim to evolve beyond Agile, it’s a process that will take time. In the meantime, we also need to produce high-performing agile teams and innovative products that delight our customers.

We don’t need to reinvent the wheel immediately and the successful teams at Consensys have figured this out. They use core principles like empiricalism, servant leadership and ShuHaRi to quickly get to success and navigate the potential pitfalls of decentralized organizations.

The formula for success in decentralized organization does not have to be difficult. We start our teams out using the three principles described here and implementing the basic ceremonies of Scrum/Agile. I encourage you to experiment with this advice. It won’t take long. Just try it out for a month and see — I think you’ll be surprised how simple it can be.

Disclaimer: The views expressed by the author above do not necessarily represent the views of Consensys AG. ConsenSys is a decentralized community withConsenSys Media being a platform for members to freely express their diverse ideas and perspectives. To learn more about ConsenSys and Ethereum, please visit our website.