Semler and Scrum – Challenges of self-organizing teams

August 28, 2010 at 1:05 am | Posted in Blogroll, Scrum and agile, Structured freedom, Systems Improvement | Leave a comment

While on vacation, I am currently rereading an excellent book “Maverick!” by Ricardo Semler, owner of Semco Brazil. He is well known for his unusual management ideas. Basically, they are bottoms up like,

  • Every new management hire is interviewed by people who would report to him. If they don’t give him an okay, he doesn’t get the job.
  • During annual salary review each person is given a choice to decide his new salary level. He is provided with information about what others at similar level are getting within and outside the company. If he asks for an exorbitant raise, management does not say no. But he has to face the peer pressure because his salary is going to affect profit share of others in the business unit.
  • Same applies to expense reports. If he decides to stay in a five-star hotels and others in similar situation normally stay in a three-star it is known to others and the peer pressure works.
  • All the employees have access to financial statements and training is given to each person on how to read the balance sheet.
  • Each new team can decide and buy the furniture they would like to use.
  • Each employee has a vote in important decisions affecting them like where to locate the new plant out of multiple choices.

In short, employees have great freedom to make decisions. They are encouraged to have all the necessary information to take a decision. As a result they also have the responsibility for the decision because their actions are visible to all and those who are affected put the pressure either encouraging or discouraging such actions.

I see a number of parallels with Scrum,

  • The processes are few and light-weight. The administrative overheads are drastically reduced.
  • Minimal but important information is collected which is freely made available to all concerned.
  • There is a shared commitment; whole team either succeeds or fails.

In short the teams are self-organized. We can see lot of references on why self-organizing teams are so effective and successful. But in practice, it takes great efforts to bring that into reality. Semler had to drive it passionately and continuously from the top before it became an accepted way of working at Semco. Similarly, Scrum teams take time to reach a stage where the teams are really self-organized. Why is it so? As Semler says “It is all about giving up the control and those who are in control find it very difficult to do so.” That is the reason, so many people impressed with and talk highly of his approach but we do not see them widely being applied in many organizations. Similarly, unless the management completely understands what is involved in Scrum and prepared to implement the spirit of Scrum, the practices of Scrum may be put in place but real benefits may still elude.

I suspect there is another aspect which is not so obvious but has an important role in creating self-reorganizing systems. People want freedom but at the same time are reluctant to give up the structures which give them comfort. You can’t suddenly give complete freedom and hope that everybody will lap it up. People need structures. Hence when the management is ready to give up control, rather than adding new structures out of insecurity they have to understand the effects of existing structures and slowly starts loosening them so that people learn to demand and use the information and take collective responsibility.

Semler is already applying what has worked in business environment to the school system in Brazil. Combination of giving up control and progressively preparing people to take freedom responsibly and maturely will help apply these ideas in lot many organizations. Similarly, the right approach of creating self-organizing teams may help software development teams even if they are not following Scrum.

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