The agile workplace is becoming increasingly common. In a McKinsey survey of more than 2,500 people across company sizes, functional specialties, industries, regions, and tenures, 37 percent of respondents said their organizations are carrying out company-wide agile transformations, and another 4 percent said their companies have fully implemented such transformations. The shift is driven by proof that small, multidisciplinary teams of agile organizations can respond swiftly and promptly to rapidly changing market opportunities and customer demands. Indeed, more than 80 percent of respondents in agile units report that overall performance increased moderately or significantly since their transformations began. In a recent article in McKinsey, Aaron De Smet, a senior partner in McKinsey’s Houston office, addresses the question who really manages in an agile organization? And what exactly does an agile manager do?
The author explains the three types of managers required to manage small teams in an agile organization. These include the chapter leader, the tribe leader, and the squad leader. Here’s an excerpt where the author examines the responsibilities for managers looking to become agile managers.
The chapter leader
Every functional reporting line has a leader. This chapter leader must build up the right capabilities and people, equip them with the skills, tools, and standard approaches to deliver functional excellence, and ensure that they are deployed to value-creation opportunities—sometimes in long-term roles supporting the business, but more often to the small, independent squads. The chapter leader must evaluate, promote, coach, and develop his or her people, but without traditional direct oversight. Chapter leaders are not involved in the day-to-day work of squads; they don’t check on or approve the work of their chapter members, and they certainly don’t micromanage or provide daily oversight. Instead, regular feedback from tribe leaders, team members, and other colleagues inform their evaluations and the kind of coaching they provide. Since they’re not providing direct oversight, their span of control can expand greatly, a fact that can eliminate several layers of management. In fact, chapter leaders often free up enough time to tackle “real work” on business opportunities as well.
The tribe leader
Since these value-creation leaders borrow or rent most of their resources from the chapters, they no longer bear the burden of building up their own functional capabilities. Instead, tribe leaders act as true general managers, mini-CEOs focused on value creation, growth, and serving customers. They must develop the right strategies and tactics to deliver desired business outcomes and to determine what work needs to get done, how much to invest in which efforts, and how to prioritize opportunities. They work with chapter leaders to match the right people to the right squads.
Like chapter leaders, tribe leaders manage less and lead more. Since they have profit-and-loss accountability, they must develop a strategic perspective on their business and their customers, a cross-functional view of the core capabilities of the broader organization (so they can efficiently secure the resources they need from chapters), and an integrated perspective of the company as a whole and how their part of the business fits in with the larger enterprise. Those who succeed will develop more of a general-manager skill set and an enterprise mind-set that can break down silos, enable collaboration across organizational boundaries, and empower product owners to provide day-to-day guidance on objectives, priorities, and tasks.
The squad leader
Team leaders, or “squad” leaders, serve a crucial purpose in the agile matrix. They aren’t the “boss” of the people on their team. They help plan and orchestrate execution of the work, and they strive to build a cohesive team. They also provide inspiration, coaching, and feedback to team members, report back on progress to tribe leaders, and give input on people development and performance to relevant chapter leaders. Think of squad leaders as individual contributors who have developed leadership skills or at least developed an interest in learning these skills. The squad-leader role can be more or less formal and can even change over time depending on what the team is working on. Once again, the challenge for someone from a more traditional company is to lead without exerting onerous control. But the rewards can be great. Some squad leaders will grow into tribe leaders, while others will continue as individual contributors with the additional skill of agile leadership.
According to the McKinsey article, the idea of autonomous teams is not new; it’s been around for decades. For instance, in the quality movement that took hold in manufacturing and continuous improvement 50 years ago, quality circles and high-performance work systems often relied on an autonomous self-managed team with an informal team leader who was not technically a boss. For example, Haier, the Chinese appliance manufacturer, has emphasized the empowerment of small teams, even if they don’t use the language we associate with agility—or focus those teams on software development, where agile has made some of its most prominent marks.
Today’s agile organizations are building on these ideas, where the squad leader is now a part of an agile matrix, where the value-creation, or tribe, leaders provide constant direction and prioritization around where the value is, and the capability, or chapter, leaders focus on ensuring deep functional expertise, common tools and competencies, and economies of scale and skill. If these leaders can become effective, nonintrusive managers, the agile company will enjoy the best of both worlds: the benefits of size and scale typically realized in large organizations, as well as the benefits of speed and nimbleness often associated with small entrepreneurial start-ups, the report author noted.