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This blog article is a continuation of the previous posts:
“Part 1 – Companies Need Motivated Employees!” and
“Part 2 – Companies Don’t Need Managers, They Need Leaders,”
both of which are linked at the end of this page.
Even if you haven’t read Part 1 or Part 2 yet, feel free to keep reading. Here’s a quick summary:
Strictly hierarchical organizational structures are no longer suitable in the digital age—adaptability and agility are what matter now. Departments work efficiently within their own silos—but with enormous coordination effort between them, causing high friction at the interfaces.
Decisions are made not by teams or close to the customer, but by a handful of managers. Different generations have very different views of work—views that vary greatly between leadership and teams—inevitably leading to conflict! For more on this, see Part 1 and Part 2 of this blog series, or the eBook linked at the end of this page.
In this part of the blog, I present a guide on how to restructure your teams into cross-functional, multidisciplinary, self-organized, and agile team communities—where the needs of each individual are respected, appreciation is lived, and your company can successfully implement innovation.
Squad Teams and Chapters for Successful Companies
Start restructuring your company to be innovation-friendly before it's too late. Along the way, there are already some companies that have not or not in time made it: Kodak, Blockbuster, Nokia, Siemens Mobile, ... The following changes and setting increase agility and flexibility as well as effectiveness and efficiency in the digital age:
- Assemble multidisciplinary teams called "Squad Teams" – each team consists of 5 to 9 members from different required functional departments – the teams have no team leads and no hierarchies
- Each Squad Team sits together in a room, organizes itself, is "empowered," and bears overall responsibility for one or more products, services, features, or customer experiences – with high degrees of freedom. This creates a sense of team ownership.
- Each Squad Team bears end-to-end responsibility: from new ideas through implementation to operation – and receives direct customer feedback. This creates a sense of customer connection.
- One Squad member is the "Product Owner" – he is primarily responsible for what is implemented – the rest of the team for how it is implemented
- Proximity to the customer and customer feedback or stakeholders and processing of metrics (Key Performance Indicators – KPIs) are crucial
- Teams working with agile methods (Scrum or Kanban) allow for an iterative approach and thus a quick response to customer/stakeholder feedback and any changes. The teams have Agile Coaches who help Squad members collaborate effectively. However, they are not part of the Squad.
- Functional coordination takes place in the functional departments, the so-called "Chapters," e.g., product/service portfolio, overall IT architecture, etc.
- Managers become leaders: functional department heads become "Chapter Leads" and practice a cooperative leadership style (Theory Y) and "servant leadership." They support team members.
- Teams provide full transparency on work progress and status through KPIs and dashboards, meeting the need for control of the leaders
From Functional Departments to Chapters and Squad Teams The terms Squad and Chapter have been widely popularized by companies such as Spotify. But is it enough to simply transform the organization from functional silos into multidisciplinary, self-organized agile teams to make teams more successful and enable innovation? No, because the new group must become a real team – a social structure.
A Real Team with Social Structure
Everyone in the team matters – not only with intellect ("Head Count") and expertise – but also with the "Know-why" (I like to refer to this as "Heart Count") with shared values, a common goal, the "Why?", a shared vision and mission.
The most important key to team success is psychological safety – a safety of team members within the team. It is about employees being able to talk about anything, express even the craziest ideas, ask even the silliest questions, and take risks without fearing negative consequences.
Google confirmed this in a study at the end of 2015, where psychological safety emerged as the most important component of a successful team. This is particularly important because employees have to step out of their comfort zone. Instead of following instructions, suddenly self-organization, independence, and responsibility are required.
Environment Encouraging Experimentation
Employees need an environment that encourages experimentation, where mistakes are allowed, a "fail-friendly environment," where learning from mistakes is permitted. Following the motto: "Fail fast, learn fast, improve fast," rather than trying to avoid them with extensive risk management.
Companies need a "culture of learning" with learning from success and mistakes. In some companies, this is celebrated with a "Wall of Shame" or at public events with "Fuckup Nights" – learning from others' mistakes to avoid repeating them.
However, most companies celebrate the opposite: annual performance reviews and associated bonuses most often reward risk avoidance and thus the avoidance of experiments
- "It affects my own wallet if I don't achieve the agreed goal!" – and
- "I have to fear for my job if I don't meet my goals."
In your company, get rid of traditional performance reviews and bonus payments! And if at all, then reward successful Squad Teams with recognition, appreciation, and gratitude – or with other spontaneous, timely, and tailored rewards.
New Product Development and IT Approaches
Product development must pursue a more customer-centric approach with Silicon Valley-tested methods, such as
- Design Thinking,
- Jobs to be Done,
- Business Model Generation,
- Lean Startup
and more.
We have developed our own Innovation Framework called the "DigitalWinners Innovation Framework", which combines these and other methods in a holistic approach. For example, by incorporating "Jobs to be Done," the success rate has increased from 17 to 86 percent - as proven by a study by an independent researcher trained at Harvard Business School.
And IT must think more towards open platforms, with APIs, SaaS, PaaS, Microservices, Micro-Frontends, DevOps, and more. It is interesting that all these approaches go hand in hand with the new organizational form, with the Squads.
Now it's Your Turn. Build Successful Teams!
Choose a product, a service, a feature, or a customer experience and form a first multidisciplinary team, a Squad. This team consists of 5 to 9 members from different required functional departments and sits together in a room – possibly initially part-time, for example, in the mornings.
The team organizes itself, is "empowered," and bears overall responsibility with high degrees of freedom. The team appoints a "Product Owner" from within and gets an Agile Coach assigned. Organize a kickoff event with an external coach who ensures good team building and initiates the team's self-organization: meetings, methodology, boards, room layout, seating arrangement, KPIs, dashboard, ...
Set up a Transformation Committee consisting of your executives and a selected employee representation. Hold regular Committee meetings to accompany the Squad Team optimally and remove obstacles. Report on the team's progress, successes, and failures in "All hands" or "Town hall" meetings. Once the first team stabilizes, set up a second team.
Let’s seize the opportunity of digitalization, take responsibility, and make the world a better place—together.
Want to learn more?
FREE EBOOK: Download the full article as a free eBook at
www.ernomarius.com/erfolgreicheteams
