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Summary

Because of changes in the environment, organizational size, products, and people, it is important to change organizational structure regularly. Implementing the concepts of generalizing specialists, wide job titles, and informal leadership greatly improves organizational adaptability.

Team boundaries need to be watched carefully because people cannot identify with a team if team membership is unclear or unstable. Various research studies seem to indicate that between three to seven people is a good team size.

Teams can be organized as either functional or cross-functional units, with the latter being the most obvious choice for optimal communication, though exceptions may exist. Communication between teams happens either via managers or primarily via the teams themselves. Again, the latter is usually preferred.

Organizational structure is most adaptable when teams work as value units, considering other teams as their customers to whom they must deliver value. New teams can be constructed when there is demand, but they must be dissolved when demand among other teams evaporates. Management layers can be beneficial to an organization provided that they too truly add value.

With authority flowing through teams from different directions, we have what is called a hybrid organization. We may also call this a panarchy or value network, when the organization primarily works as a network, with (optionally) multiple overlapping hierarchies.

Last but not least, for optimal communication it is important that managers have as few secrets as possible, make all information they have visible, and make an honest attempt at connecting with their people.

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