Book Notes #001: Agile IT Organization Design by Sriram Narayan

Agile IT Organization Design shows how organizational design helps deliver organizational agility and, in turn, helps IT and business Agility.

Title: Agile IT Organization Design: For Digital Transformation and Continuous Delivery
Author: Sriram Narayan
Year: 2015
Pages: 304

Agile IT Organization Design by Sriram Narayan is a comprehensive guide for managers and executives who want to improve the quality and speed of their software development processes.

To gain the full benefits of agility in any software organization, you need to extend the organization as a whole, not just for some development teams, in a book that states the applicability of Agile principles in designing an Agile IT organization followed by the explanation of the macro-level view of the structure of organizations. 

The book provides a comprehensive guide to designing an agile IT organization that can adapt to changing business needs and deliver value to customers.

As a result, I gave this book a rating of 8.0/10.

For me, a book with a note 10 is one I consider reading again every year. Among the books I rank with 10, for example, is Dale Carnegie’s How to Win Friends and Influence People.

3 Reasons to Read Agile IT Organization Design

Adopting Agile Principles

Narayan provides a roadmap for implementing agile methodologies, enabling swift adaptation to changing market dynamics.

Empowering Teams

Narayan advocates for a shift towards decentralized decision-making, empowering teams to take ownership of their work and drive meaningful change within the organization.

Narayan adeptly navigates the complexities of modern IT organizations, offering clarity amidst chaos. Readers gain invaluable insights into managing intricate systems and processes with agility and efficiency.

Book Overview

The author explains the centralized and decentralized structures with their pros and cons.

He then goes on to provide thorough coverage of team design, accountability, alignment, project finance, tooling, metrics, organizational norms, communication, and culture.

Agile IT Organization Design provides a basis for reviewing and reshaping the IT organization to equip it better for the digital age, discussing how to differentiate between organizational activities and outcomes and forming teams accordingly, how to execute streams of work that cut across different product-centric teams, and the role of project and program managers in product-centric IT, learning how to eliminate the specific organizational silos that cause the most problems

The author’s extensive experience and deep understanding of agile principles shine through in the way he presents the material.

The book is divided into several sections, each focusing on a critical aspect of agile IT organization design.

Agile IT Organization Design demonstrates how to integrate agility with sales, marketing, product development, engineering, and operations, helping each function deliver more value individually and link it with the rest of the business as well as evaluate and improve organization designs to enhance autonomy, mastery, and purpose. 

Addressing people, process, and technology, Agile IT Organization Design guides you in improving both the dynamic and static aspects of organization design, addressing team structure, accountability structures, organizational norms and culture, metrics, and more.

Preface
Acknowledgments
About the Author
Glossary

Chapter 1: Context
1.1 Focus
1.2 Business, IT, and Shadow IT
1.3 Business-IT Effectiveness
1.4 Digital Transformation
1.5 Bimodal IT and Dual Operating Systems
1.6 Angles of Coverage
1.7 Summary

Chapter 2: The Agile Credo
2.1 Understanding the Agile Manifesto
2.2 Continuous Delivery and DevOps
2.3 Agile Culture
2.4 Common Themes
2.5 Isn’t Agile Dead?
2.6 Summary

Chapter 3: Key Themes
3.1 Software Development Reconsidered
3.2 Govern for Value over Predictability
3.3 Organize for Responsiveness over Cost-efficiency
3.4 Design for Intrinsic Motivation and Unscripted Collaboration
3.5 Summary

Chapter 4: Superstructure
4.1 Business Activities and Outcomes
4.2 Centralization and Decentralization
4.3 Silos
4.4 Summary of Insights
4.5 Summary of Actions

Chapter 5: Team Design
5.1 Framing the Problem
5.2 Activity-oriented Teams
5.3 Shared Services
5.4 Cross-functional Teams
5.5 Cross-functionality in Other Domains
5.6 Migrating to Cross-functional Teams
5.7 Communities of Practice
5.8 Maintenance Teams
5.9 Outsourcing
5.10 The Matrix: Solve It or Dissolve It
5.11 Summary of Insights
5.12 Summary of Actions

Chapter 6: Accountability
6.1 Power and Hierarchy
6.2 Balance Autonomy with Accountability
6.3 Assign Accountability
6.4 Minimize Power Struggles
6.5 Decide on an Outcome Owner
6.6 Migration
6.7 Decision Accountability
6.8 Planning and Execution
6.9 Org Chart Debt
6.10 Summary of Insights
6.11 Summary of Actions

Chapter 7: Alignment
7.1 Articulate Strategy for General Alignment
7.2 Aligning IT with Business
7.3 Structural Alignment
7.4 Making Business Play Its Part
7.5 Summary of Insights
7.6 Summary of Actions

Chapter 8: Projects
8.1 What Is Wrong with Plan-driven Software Projects?
8.2 Budget for Capacity, Not for Projects
8.3 Business-capability-centric IT
8.4 Project Business Cases
8.5 Value-driven Projects
8.6 Project Managers
8.7 Governance
8.8 Change Programs and Initiatives
8.9 Summary of Insights
8.10 Summary of Actions

Chapter 9: Finance
9.1 Relevance
9.2 Cost Center or Profit Center
9.3 Chargebacks
9.4 CapEx and OpEx
9.5 Conventional Budgeting
9.6 Agile Budgeting
9.7 Summary of Insights
9.8 Summary of Actions

Chapter 10: Staffing
10.1 Dealing with the Talent Crunch
10.2 Go Beyond Project Teams
10.3 Better Staffing
10.4 Summary of Insights
10.5 Summary of Actions

Chapter 11: Tooling
11.1 Access Control for Unscripted Collaboration
11.2 Subtle Effects of the Toolchain
11.3 Technology Isn’t Value Neutral
11.4 Tool Evaluation
11.5 Summary of Insights
11.6 Summary of Actions

Chapter 12: Metrics
12.1 Metrics Don’t Tell the Whole Story
12.2 Dashboards Promote Ignorance
12.3 The Problem with Targets and Incentives
12.4 Reforming the Metrics Regime
12.5 Designing Better Metrics
12.6 Objections to Metrics Reform
12.7 Migration
12.8 Summary of Insights
12.9 Summary of Actions

Chapter 13: Norms
13.1 What Are Norms?
13.2 Reinforcing Norms
13.3 Cooperation over Competition
13.4 Living Policies
13.5 Consistency over Uniformity
13.6 Ask for Forgiveness, Not for Permission
13.7 Confidential Surveys
13.8 Balance Theory and Practice
13.9 Summary of Insights
13.10 Summary of Actions

Chapter 14: Communications
14.1 Intrinsic Motivation
14.2 Interpersonal Communications: Problems
14.3 Interpersonal Communications: Mitigation
14.4 Scaling Employee Engagement through Internal Communications
14.5 Deliberating in Writing
14.6 The Use and Misuse of Visual Aids
14.7 Documents, Reports, and Templates
14.8 Summary of Insights
14.9 Summary of Actions

Chapter 15: The Office
15.1 Open-plan Layouts
15.2 Ergonomics
15.3 Remote Working
15.4 Summary of Insights
15.5 Summary of Actions

Chapter 16: Wrap-up
16.1 Summary of Effects
16.2 Order of Adoption
16.3 Information Radiators
16.4 Sample Exercise
16.5 IT Services
16.6 GICs
16.7 Beyond IT

Bibliography

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Ackoff, R. L. 1999. Re-creating the corporation: A design of organizations for the 21st century. New York: Oxford University Press.

Austin, R. D. 1996. Measuring and managing performance in organizations. New York: Dorset House.

Blackstaff, M. 2012. Finance for IT decision makers: A practical handbook. 3rd ed. Swindon, UK: BCS Learning and Development Ltd.

Cain, S. 2012. Quiet: The power of introverts in a world that can’t stop talking. New York: Crown Business.

DeMarco, T. 2002. Slack: Getting past burnout, busywork, and the myth of total efficiency. New York: Broadway Books.

Fried, J., and D. H. Hansson. 2013. Remote: Office not required. New York: Crown Business.

Highsmith, J. 2014. Adaptive leadership: Accelerating enterprise agility.Boston: Addison-Wesley.

Hofstede, G., G. J. Hofstede, and M. Minkov. 2010. Cultures and organizations: Software of the mind. 3rd ed. New York: McGraw-Hill.

Hsieh, T. 2010. Delivering happiness: A path to profits, passion, and purpose. New York: Business Plus.

Humble, J., and D. Farley. 2010. Continuous delivery: Reliable software releases through build, test, and deployment automation. Boston: Addison-Wesley.

Kim, G., K. Behr, and G. Spafford. 2013. The Phoenix Project: A novel about IT, DevOps, and helping your business win. Portland, OR: IT Revolution Press.

Kohn, A. 1999. Punished by rewards: The trouble with gold stars, incentive plans, A’s, praise and other bribes. Boston: Mariner Books.

Kotter, J. P. 2014. Accelerate: Building strategic agility for a faster-moving world. Cambridge: Harvard Business School Press.

Kuhn, T. S. 1962. The structure of scientific revolutions. Chicago: University of Chicago Press.

Lakoff, G. 2003. Metaphors we live by. Chicago: University of ChicagoPress.

Lencioni, P. 2006. Silos, politics and turf wars: A leadership fable about destroying the barriers that turn colleagues into competitors. San Francisco: Jossey-Bass.

McLuhan, M. 1994. Understanding media. Cambridge: The MIT Press.

Merton, R. K. 1968. Social theory and social structure. New York: The Free Press.

Pink, D. H. 2009. Drive: The surprising truth about what motivates us. New York: Riverhead Books.

Reinertsen, D. G. 2009. The principles of product development flow. Redondo Beach, CA: Celeritas Publishing.

Rieger, T. 2011. Breaking the fear barrier: How fear destroys companies from the inside out and what to do about it. New York: Gallup Press.

Ries, E. 2011. The lean startup: How today’s entrepreneurs use continuous innovation to create radically successful businesses. New York: Crown Business.

Ross, J. W., P. Weill, and D. C. Robertson. 2006. Enterprise architecture as strategy. Cambridge: Harvard Business School Press.

Schein, E. H. 2013. Humble inquiry: The gentle art of asking instead of telling. San Francisco: Berrett-Koehler Publishers.

Schneider, W. 1994. The reengneering alternative. New York: McGrawHill.

Semler, R. 1995. Maverick: The success story behind the world’s most unusual workplace. New York: Grand Central Publishing.

Topinka, J. 2014. IT business partnerships: A field guide. Minneapolis, MN: CIO Mentor Press.

Treacy, M., and F. Wiersema. 1995. The discipline of market leaders: Choose your customers, narrow your focus, dominate your market. Cambridge: Perseus Books.

The real-world relevance of the book is further enhanced by the author’s inclusion of practical advice and actionable insights. Narayan doesn’t just present theoretical concepts; he provides clear guidance on how to apply them in real-world situations.

This makes the book an invaluable resource for organizations that are looking to embark on their agile journey, as it offers a roadmap for success that is grounded in practicality and real-world experience.

Teams must have high autonomy over what they work on, not just how they implement it.

But if teams are all super autonomous, they will all go off in different directions. Sriram terms this runaway autonomy, and it’s a genuine concern.

So is the answer more management and control?

Actually, the answer is to align teams with business outcomes.

If the goal of a team is to improve a business outcome, then it will be oriented toward system-level benefits, by creating truly cross-functional teams, carefully analysing business outcomes, and appointing outcome owners.

Agile IT Organization Design provides a basis for reviewing and reshaping the IT organization to equip it better for the digital age, discussing how to differentiate between organizational activities and outcomes and forming teams accordingly, how to execute streams of work that cut across different product-centric teams, and the role of project and program managers in product-centric IT.

What are the Key Ideas

Agile Transformation Framework

Narayan introduces a comprehensive framework for driving agile transformation within IT organizations. By addressing key areas such as structure, processes, culture, and leadership, businesses can orchestrate a holistic transformation journey.

Lean Principles in Practice

Drawing inspiration from lean principles, it explores strategies for eliminating waste and maximizing efficiency across IT operations. From streamlining workflows to optimizing resource allocation, businesses can achieve agility and responsiveness.

Scalable Architecture Design

Scalability is a cornerstone of agile IT organization design. Narayan delves into the intricacies of designing scalable architectures that can adapt to evolving business needs and accommodate future growth seamlessly.

Continuous Delivery Pipeline

Building upon the principles of continuous integration and continuous delivery (CI/CD), it outlines a blueprint for establishing a robust delivery pipeline. By automating key stages of the software delivery process, organizations can achieve speed, reliability, and consistency in product releases.

What are the Main Lessons

Cross-Functional Collaboration

Foster collaboration between IT teams and business stakeholders to ensure alignment with organizational goals and priorities.

Continuous Learning

Cultivate a learning mindset within the organization, encouraging employees to seek out new knowledge and skills to stay ahead in a rapidly evolving landscape.

Customer-Centricity

Prioritize the needs and preferences of customers, leveraging feedback to drive product development and service delivery initiatives.

My Book Highlights & Quotes

Digital transformation is a lot more dependent on Agile transformation than is apparent from high altitudes.

Simply doing sprints or iterations doesn’t make it iterative development if feedback is not sought in between or is ignored in deference to a release plan.

Handoffs are mostly a result of specialization. Organization design cannot reduce these handoffs, but it can make them faster and cheaper by making them occur inside a single team.

Tools that blur boundaries between specialists are better than those that reinforce them.

Expensive handoffs encourage large batch sizes to reduce the total number of handoffs.

Lean product discovery techniques (for start-ups and enterprises) help with the first mile. Continuous delivery and DevOps help with the last mile. Agile software development has become mainstream for the miles in between.

How do we go about reinforcement? Here is one way to do it for some organizational norms: Create an internal blog for each norm. Explain the value of the norm in an introductory post from leadership. Use subsequent posts to narrate supporting stories. Employees subscribe to the blog, vote up or like stories, and comment on posts.

Recognize that a permission culture is a risk-averse culture. Embrace (perhaps tacitly) the norm of asking for forgiveness rather than permission. It encourages people to take initiative without being too fearful of breaking rules.

In enterprise IT, a capability team owns all systems relevant to the capability. They may be systems of record, differentiation, or innovation. In the spirit of DevOps, they are built and run by the capability team.

Systems of record (e.g., payroll and HR) are like utilities (electricity, water, etc.). Although they are essential, they need to be cost-efficient. Systems of differentiation (e.g., a commercial SaaS offering) provide competitive advantage. Systems of innovation are built to try new ideas and graduate the ones that perform well to systems of differentiation.

Product lines (or LOBs) need to be individually successful. This is success of the first order. Exploiting cross-product synergies, offering bundles, and achieving cross-product standardization for marketing are examples of higher-order success. Do not organize for higher-order success before first-order success is achieved. Doing so puts the cart before the horse.

Cross-functional teams fold the entire software delivery value stream into a single team, rather than let it span across multiple activity-oriented teams. This reduces the cost of handoffs, allows reduction in batch size, and thereby decreases cycle time (improving responsiveness).

To bridge the divide between planning and execution, overlap them. It is possible to design an organization where planners are required to spend, say, 20% of their time in execution.

The adaptability of a process correlates inversely with the length of its feedback loops. In order to fail-fast (and learn quickly) rather than slowly, we need short feedback loops.

Whole value stream optimization is far more important than optimizing activities that constitute the stream.

In conclusion, Agile IT Organization Design by Sriram Narayan is a must-read for any manager or executive looking to improve their software development and delivery processes. 

Sriram Narayan’s book Agile IT Organization Design is not the only book on agile IT organization design.

However, it is one of the most comprehensive and practical resources available.

Here are a few other books that focus on agile IT organization design:

  1. The Lean Enterprise by Jeanne M. Ross, Michael A. Cusumano, and Donald F. Gross
  2. Scaling Lean & Agile Development by Bas Vodde and Craig Larman

Not only does Agile IT Organization Design provide insightful advice and strategies to help organizations transition to a product-centric model, but it also offers practical tips and guidance to help create an agile organization and foster continuous delivery. 

With its actionable advice and case studies, Agile IT Organization Design will undoubtedly leave readers with the tools they need to redesign their organizations for success.

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