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May 28, 2020

The Problem with Org Charts

By IT Revolution

Adapted from Team Topologies: Organizing Business and Technology Teams for Fast Flow by Matthew Skelton and Manuel Pais.


Technology workers are in a constant state of action: creating and updating systems at an unbelievable rate, and combining different types of technology to create a compelling user experience. Mobile applications; cloud-based services; web applications; and embedded, wearable, or industrial IoT devices all need to interoperate effectively to achieve the desired business outcomes.

Building and running these highly complex, interconnected software systems is a team activity, requiring the combined efforts of people with different skills across different platforms. But despite these risks and demands, many organizations are still organizing their people and teams in ways that are counterproductive to modern software development and operations.

Communication Structures of an Organization

Most organizations want or are required to have a single view of their teams and people called the “org chart.” This chart depicts the teams, departments, units, and other organizational entities, as well as how they relate to each other. It usually shows hierarchical lines of reporting, which imply lines of communication running “up and down” the organization.

The org chart does have its uses in the context of building software systems, specifically around regulatory and legal compliance. However, in a highly collaborative context filled with uncertainty over outcomes, relying on the org chart as a principal mechanism of splitting the work to be done leads to unrealistic expectations. We need to rely instead on decoupled, long-lived teams that can collaborate effectively to meet the challenge of balancing speed and safety.

The problem with taking the org chart at face value is that we end up trying to architect people as if they were software, neatly keeping their communi­cation within the accepted lines. But people don’t restrict their communications only to those connected lines on the chart. We reach out to whomever we depend on to get work done. We bend the rules when required to achieve our goals. That’s why actual communication lines look quite different from the org chart (see below).

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Org Chart Thinking Is the Problem

Traditional org charts don’t help us understand what the actual patterns of communication in our organization are, as illustrated in the figure above. Instead, organizations need to develop more realistic pictures of the expected and actual communication happening between individuals and teams. The gaps will help inform what types of systems are a better fit for the organization.

Furthermore, decisions based on org-chart structure tend to optimize for only part of the organization, ignoring upstream and downstream effects. Local optimizations help the teams directly involved, but they don’t necessarily help improve the overall delivery of value to customers. Their impact might be negligent if there are larger bottlenecks in the stream of work. For example, having teams adopting cloud and infrastructure-as-code can reduce the time to provision new infrastructure from weeks or months to minutes or hours. But if every change requires deployment (to production) approval from a board that meets once a week, then delivery speed will remain weekly at best.

[perfectpullquote align=”left” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]…organizations need to develop more realistic pictures of the expected and actual communication happening between individuals and teams.[/perfectpullquote]

Systems thinking focuses on optimizing for the whole, looking at the overall flow of work, identifying what the largest bottleneck is today, and elimi­nating it. Then repeat. Team Topologies focuses on how to set up dynamic team structures and interaction modes that can help teams adapt quickly to new conditions, and achieve fast and safe software delivery. This might not be your largest bottleneck today, but eventually, you will face the issue of rigid team structures with poor communication and/or inadequate processes, slowing down delivery.

Thinking of the org chart as a faithful representation of how work gets done and how teams interact with each other leads to ineffective decisions around allocation of work and responsibilities. Much like a software architecture document gets outdated as soon as the actual software development starts, an org chart is always out of sync with reality.

Beyond the Org Chart

So if org charts are not an accurate representation of organizational structures, what is? Niels Pflaeging, author of Organize for Complexity, identifies not one but three different organizational structures in every organization:

  1. Formal structure (the org chart)—facilitates compliance
  2. Informal structure—the “realm of influence” between individuals
  3. Value creation structure—how work actually gets done based on inter-personal and inter-team reputation

Pflaeging suggests that the key to successful knowledge work organizations is in the interactions between the informal structure and the value creation structure (that is, the interactions between people and teams). Other authors have proposed similar characterizations, such as Frédéric Laloux in Reinventing Organizations or Brian Robertson’s Holacracy approach.

The Team Topologies approach acknowledges the importance of informal and value creation structures as defined by Pflaeging. By empowering teams, and treating them as fundamental building blocks, individuals inside those teams move closer together to act as a team rather than just a group of people. On the other hand, by explicitly agreeing on interaction modes with other teams, expectations on behaviors become clearer and inter-team trust grows.

Over the last several decades, there have been many new approaches to organizing businesses, but usually the new design remains a static view of the organization that does not take into consideration the real behaviors and structures that emerge after reorganization. For instance, the “matrix management” approach that started in the 1990s—and became quite popular over the next couple of decades—tried to address the inherent complexity of highly uncertain, highly skilled work by having individuals report to both business and functional managers. Despite a clearer focus on business value compared to a purely functional organization of teams, this is still a static view of the world that becomes outdated as the business and technology domains quickly evolve.

[perfectpullquote align=”right” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]…what is needed is a model that is adaptable to the current situation[/perfectpullquote]

For workers, re-orgs, like introducing matrix management, can bring a lot of fear and worry. Often, it’s seen as a time and effort drain that is more likely to set the business back rather than move it forward. And once the next technological or methodological revolution hits, the business undertakes yet another re-org, breaking down established forms of communication and splitting up teams that were just starting to get their mojo.

It is increasingly clear that relying on a single, static organizational structure, like the org chart or matrix management, is untenable for effective outcomes with modern software systems. Instead of a single structure, what is needed is a model that is adaptable to the current situation—one that takes into consideration how teams grow and interact with each other. Team Topologies provides the (r)evolutionary approach required to keep teams, processes, and technology aligned for all kinds of organizations.

In her excellent 2015 book, Guide to Organisation Design: Creating High-­Performing and Adaptable Enterprises, Naomi Stanford lists five rules of thumb for designing organizations:

  1. Design when there is a compelling reason.
  2. Develop options for deciding on a design.
  3. Choose the right time to design.
  4. Look for clues that things are out of alignment.
  5. Stay alert to the future.

Team Topologies: A New Way of Thinking about Teams

The Team Topologies approach brings new thinking around effective team structures for enterprise software delivery. It provides a consistent, actionable guide for evolving team design to continuously cope with technology, people, and business changes, covering size, shape, placement, responsibilities, boundaries, and interaction of teams building and running modern software systems.

Team Topologies provides four fundamental team types—stream-aligned, platform, enabling, and complicated-subsystem—and three core team interaction modes—collaboration, X-as-a-Service, and facilitating. Together with awareness of Conway’s law, team cognitive load, and how to become a sensing organization, Team Topologies results in an effective and humanistic approach to building and running software systems.

In particular, it looks at ways in which different team topologies can evolve with technological and organizational maturity. Periods of technical and product discovery typically require a highly collaborative environment (with overlapping team boundaries) to succeed. But keeping the same structures when discovery is over (established technologies and product) can lead to wasted effort and misunderstandings.

[perfectpullquote align=”left” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]The end goal is to help teams produce software that aligns with customer needs and is easier to build, run, and own.[/perfectpullquote]

By emphasizing an adaptive model for organization design and actively prioritizing the interrelationship of teams, the Team Topologies approach provides a key technology-agnostic mechanism for modern software-intensive enterprises to sense when a change in strategy is required (either from a business or technology viewpoint). The end goal is to help teams produce software that aligns with customer needs and is easier to build, run, and own.

Team Topologies also emphasizes a humanistic approach to designing and building software systems. It sees the team as an indivisible element of software delivery and acknowledges that teams have a finite cognitive capacity that needs to be respected. Together with the dynamic team design solidly grounded on Conway’s law, Team Topologies becomes a strategic tool for solution discovery.

Rethink Team Structures, Purpose,
and Interactions

Developing and operating software effectively for modern, interconnected systems and services requires organizations to consider many different dimensions. Historically, most organizations have seen software development as a kind of manufacturing to be completed by separate individuals arranged into functional specialties, with large projects planned up front and with little consideration for sociotechnical dynamics. This led to the prevailing problems depicted below.

 

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The Agile, Lean IT, and DevOps movements helped demonstrate the enormous value of smaller, more autonomous teams that were aligned to the flow of business, developing and releasing in small, iterative cycles, and course correcting based on feedback from users. Lean IT and DevOps also encouraged big strides in telemetry and metrics tooling for both systems and teams, helping people building and running software to make proactive, early decisions based on past trends, rather than simply responding to incidents and problems as they arose.

However, traditional organizations have often been limited in their ability to fully reap the benefits of Agile, Lean IT, and DevOps due to their organizational models. It’s no surprise that there is a strong focus on the more immediate automation and tooling adoption, while cultural and organizational changes are haphazardly addressed. The latter changes are much harder to visualize, let alone to measure their effectiveness. Yet having the right team structure, approach, and interaction in place, and understanding their need to evolve over time is a key differentiator for success in the long run.

In particular, traditional org charts are out of sync with this new reality of frequent (re)shaping of teams for collaborative knowledge work in environments filled with uncertainty and novelty. Instead, we need to take advantage of Conway’s law (organizational design prevails over software architecture design), cognitive load restrictions, and a team-first approach in order to design teams with clear purposes and promote team interactions that prioritize flow of software delivery and strategic adaptability.

The goal of Team Topologies is to give you the approach and mental tools to enable your organization to adapt and dynamically find the places and timing when collaboration is needed, as well as when it is best to focus on execution and reduce communication overhead.

Read more in Team Topologies: Organizing Business and Technology Teams for Fast Flow by Matthew Skelton and Manuel Pais.

- About The Authors
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IT Revolution

Trusted by technology leaders worldwide. Since publishing The Phoenix Project in 2013, and launching DevOps Enterprise Summit in 2014, we’ve been assembling guidance from industry experts and top practitioners.

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1 Comment

  • Dominik Sigmund Jun 8, 2020 9:31 am

    Great Article, Thank you! We experience the same Obstacles with our org-chart here. Leaders are often called "hierarchs", so we have a strong tendency here ... Will read the book :-)

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