Alignment of Individual and Organizational Goals

Individuals within organizations are motivated to work toward goals that ultimately result in increased compensation, promotion, and peer recognition.  Most often, however, these individual motivations are not directly aligned with the organization’s broader goals.  The negative consequence is that while individuals in the organization strive toward personal motivations, very few people, if any, are directly concerned with the organization’s ultimate aim: delivering products and/or services to market.

The differences between individual and organizational purposes is propagated in several ways at organizations I’ve visited in my role as a consultant.  The root origin of most of these issues is a strong emphasis on functional roles:

  1. Individuals working in organizations with strong functional roles are tasked with producing artifacts and intermediate products rather than whole slices of functionality.  Rather than focusing on the big picture, it is the individual’s job to produce intermediate artifacts as quickly and as efficiently as possible.  An analyst should synthesize requirements and produce specifications as quickly and effiicently as possible; a designer should take requirements specs and produce UML diagrams; coders should execute those designs; a tester should find as many bugs as possible; etc.  However, in this system who is concerned with the organization’s real goal of getting product to market?
  2. Financial incentives are based on intermediate artifacts, not functional product.  Individuals are often evaluated for raises and bonuses by functional managers, even in matrix organizations.  Rather than evaluating individuals in light of their contribution toward getting product out the door, organizations tend to evaluate solely on the individual’s functional role.  A tester is evaluated according to how well she tests; designers are evaluated according to their ability to create UML documents; etc.
  3. Promotions are based functionally, which creates another form of incentive that diverts attention from the organization’s goals.  While similar to financial incentives, promotions are another way organizations reinforce what they value.

Traditional software organizations motivate individuals to produce intermediate artifacts

In this type of environment, there is a general lack of responsibility; in fact, who is responsible for the successful release of the product?   Let the finger pointing begin…

This focus and incentive system based on intermediate artifacts is condemnable under the practices and principles of Lean thinking.  In lean, the build up of inventory is seen as a symptom of local sub-optimization.  Consider, for example, a manufacturing line where X is produced first in the line, then Y is attached to X down the line to produce Z, the final product.  If the workers creating X get very good at their jobs and produce X at rate faster than Y can be attached to it, the whole system is constrained by a bottleneck at Y.  The end goal is producing Z, not X, so getting very good at producing X is a sub-optimization that does not benefit the organization.  In fact, it causes problems because now the organization needs to store the excess X somewhere.

The ideal in lean manufacturing is the one-piece flow system; a small team of cross-functional workers build an entire product to the extent that this is possible.  That means that a single individual may first build X and then change machinery to build Y, attach X and Y using a third machine to produce the functional product Z.  While on the surface this task and machinery switching seems inefficient, in fact the system as a whole is producing real end product (Z) faster.  That is, the cycle time from start to finish for a single unit of product is faster because the process removes all local sub-optimizations.

How Agile Methods Align Organizational and Personal Goals

Agile methods, especially Scrum with its requirement that an increment of functioning software be produced every iteration, strive to achieve the same thing: low cycle time and optimizations that are aligned with the organization’s real goal of bringing product to market.

Organizations adopting Agile methods soon find that functional roles and even a matrix set-up simply get in the way of meeting the organization’s objectives.  Small cross-functional project teams are created that are tasked with and evaluated against their ability to produce working, functional product.  Individuals are only measured against their impact on the project team toward producing functional product.

An Agile team's goals are product increments

Rather than focusing on being promoted within a functional roles or producing intermediate artifacts, the people responsible for building the organization’s product start thinking about the end product as their goal!  This starts to eliminate task-oriented thinking (“I’m done with my stuff, so I’m going home.”) and people start caring about the big picture.

As the Agile process takes root and is refined by the organization, the project team’s definition of what it means to be “done” starts changing to include more and more of what is necessary to take the product straight into production.  Eventually, there is no need for “safety nets” as the quality of product coming out of project teams is high already.  In the end, the people building the product as a whole unit realize it is they who are ultimately responsible for the success of the product.

Victor Szalvay

Victor Szalvay currently leads product development for CollabNet’s ScrumWorks® product suite. In that capacity, he works closely with customers, stakeholders, and the development teams to deliver high business value each release cycle. With more than 150,000 active users worldwide, ScrumWorks is used by more than half of the Fortune 100 and boasts the largest market share of any Agile management tool.

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