Could an Enterprise be a Republic?

The current year is a good example of circumstances in which agile practices are beneficial. Our world is volatile, uncertain, complex and ambiguous. The quantity and quality of customers’ purchases have varied greatly. Forecasts for the future are uncertain because the facts needed to make decisions are not known. The situation is so complex and new that our traditional ways of planning our activities are not possible.

Sitra has renewed its mega-trends for 2020. Population growth is declining. We are getting older. However, technological development continues to be strong. A long period of peace has enriched humanity. The result is a shortage of demand, as a large proportion of people already have almost everything necessary. Being overweight is a bigger problem than hunger.

As the economy changes, so does the world of work. Employment in a permanent employment relationship is declining because employers are no longer able to protect their employees from changes and fluctuations in customer purchases. We want to get rid of fixed costs, which increases the amount of variable costs. There will be outsourcing. Employment relationships become short-term, part-time and flexible. Businesses are looking for cheap labour and networking with other organizations.

We then end up in a situation where the leader has no subordinates but partners. New ways of leading are needed to lead equal partners.

Authoritarian leadership

Authoritarian leadership is a current reality in companies, at the state level, and in various other organizations. It has many different forms, but the hierarchical organizational structure is its most typical manifestation. In a class society, the king and the nobility have privileges in terms of both decision-making and income distribution. Corporate management, on the other hand, emphasizes its work to maximize shareholder value.

Centralized decision-making is at its best when quick and holistic decisions are needed. Warfare is an example of a situation where there is no time to discuss different decision options. However, a manager can become a bottleneck and the quality of decisions depends on the manager and the information available to him/her.

The execution of the leader’s orders is difficult without the involvement of subordinates. Compliance must be monitored. Rebels are punished and supporters are rewarded. Civil liberties such as freedom of expression and sources of livelihood are restricted. Media control and propaganda are management tools to stay in power, even as the number of lower-level leaders grows.

Ultimately, stifling citizen initiative and innovation will erode authoritarian societies. The palace revolution is a more likely option for them than a popular uprising.

In the corporate world, a subordinate is rewarded for obedience with pay, bonuses, employee benefits, and career advancement. Rebels and dangerous competitors, on the other hand, are fired or excluded from the networks.

Republic

The republic is a form of government that, throughout history, has proved to be a model in which nations have prospered with the ingenuity and entrepreneurship of large masses of people. Also on the business side, innovations largely take place in small business networks.

The republic is ruled by law, not by a ruler or a ruling elite. All people are born equal. The law is the same for everyone, and no one has privileges based on their identity. In the authoritarian model, typical ways to define a privileged class are descent, race, religion, language, gender, caste, age, party, and so on.

In the republics, decision-making is decentralized. Municipalities and provinces have self-government and decision-makers are fixed-term representatives of the people and elected by them. Major issues are decided by referendum. Organizations are low and decisions are made at the lowest possible level.

The constitutions of the republics define civil rights, which guarantee citizens e.g. the right to pursue a trade, to express one’s views and to be safe from unjustified arrests and penalties. They include safeguards to limit the potential for abuse of power.

As a consumer, a person makes his/her own purchasing decisions and companies adapt to consumer demand and its consequences.

An agile leader in a republican network?

So the world is changing as we get richer and get older. In a world of abundance, you don’t have to do everything yourself. For example, the music in Apple’s music store is not Apple’s own.

In the company, the manager finds that he/she no longer has subordinates, penalties and rewards. The people to whom he/she leads come from customers, several partners representing different suppliers and other stakeholders. There is no direct authority to command and influence must be earned. Still, together they form a team. Let’s think about leading a Utuber team.

It all starts with a change of attitude. The purpose of work, autonomy and self-development are of great importance to individuals. The team is based on trust, fairness, reciprocity, openness and respect. Our partners are professionals, not subcontractors or employees. They have other options.

Because our cooperation is based on the desire of equal partners to work together, we write cooperation agreements instead of an organizational chart. The Constitution of the Republic is equivalent to the shareholders’ agreement of the company’s founders. In projects, the participants have to get WIN-WIN-solution where each party’s responsibilities and rights are defined. The salary model is connected to the income stream received from the customer.

Of course, the agreement is only the starting point. An agile leader needs to be present, participate, listen, and serve his/her team. So what can he do for his team? Facilitation, counselling, mentoring, training and coaching are a key set of services, but on a case-by-case basis, there are a whole lot of more. Decisions are made by those who are best placed to do so. Openness, honesty, fairness and respect are crucial in interactions. The free rider problem will not be eliminated by mere agreements, despite security mechanisms. Everyone must grow in the responsibility and reciprocity required for cooperation.

Summary

The Republic model teaches companies how a large number of people can work effectively as a loosely networked community to solve complex, changing, and ambiguous problems. In addition to the laws, the parties need a strong belief that life can give more than a zero-sum game.

Critical Thinking

Agile thinking that is common in the IT industry is suitable for other areas of life as well. In this post, we apply it to current topics. By critical thinking we mean skepticism about using unverified assumptions in decision making.

Solving Complex Adaptive Problems

We use Scrum framework within which people can address complex adaptive problems,. Its core is empiricism that asserts that knowledge comes from experience and making decisions is based on what is known. It employs an iterative, incremental (repetitive and additive) approach to optimize predictability and control risk while productively and creatively delivering products of the highest possible value

In complex problems cause and effect relationships are difficult to observe. They are non-linear. For example the spread of a pandemic started exponentially and has a long tail towards zero. It has a  feedback loop where immune people do not spread the disease. Incubation period is an example of a time delay between the cause and effect.

In complex problems cause and effect relationships are difficult to observe. They are non-linear. For example the spread of a pandemic started exponentially and has a long tail towards zero. It has a  feedback loop where immune people do not spread the disease. Incubation period is an example of a time delay between the cause and effect.

To analyze a problem we identify the influencing factors. For example the spread of a virus depends on the virus itself and how people socially distance from each other. Fish-bone diagram can be used to describe the factors.

Causal loop diagram shows the influencing factors and their relationship.

 

Cause or Effect?

Vitamin D has been proposed as a solution but we are not sure whether the vitamin reduces viral infections or viruses consume vitamin resources or a person prone to infections also has limited vitamin reserves or some combination of these.

Just correlation of factors is not enough. We need to ensure the mechanism. We may have a mechanism but not the effect. Timing and dose has an impact on its effectiveness and adverse and side effects in humans. We can use calculations and computer models, test tube and laboratory tests, pathology and experiment with animals to fail faster.

Because causes have their own causes, we do root cause analysis to go deeper. 5 whys is a typical technique to find the factors that should be changed. For example we would like to know why some of the old people who had the virus died. Note that unambiguous, simple chain of causes and effects does not necessarily exist.

In wicked problems effect emerges from the collaboration of several influencing factors,  observations look chaotic and statistics do not show enduring correlations. You may find bounds within which the effect fluctuates. They are called (strange) attractors.

Scientific Method

Scientific Method is based on empiricism. Organizations thrive with the culture of experimentation.

Randomized double-blind study is the gold standard of empirical research. If we are developing a new drug we need to know whether the healing is due to the drug or something else. In a such study patients are randomly divided into two groups: 1. those who get the new medicine and the best treatment and 2. Those who are receiving placebo and the best treatment.

Results depend on the sample and patient selection. Because there is a chance of chance, studies have be repeatable. We need to create the research plan in advance and define success. Is it to be alive 5 years after the study, or 50 years or something else.

When we are designing complex products we need to have empirical evidence, facts , to support our assumptions the product can be built and that customers want to buy it. A/B-testing is widely used.

Cognitive Bias, Image Marketing

When we look at any information, thinking slow and analytically takes energy. We use intuition, the fast way instead[1].  Then we have deal with cognitive biases [2] and logical fallacies[3]. It is easiest to deceive oneself.

We believe that we know more than we really know. We believe in people like us. We advocate results that useful for us and confirm our assumption. It is easy to be right in hind-sight and think in a given context, inside the box.

Logic is difficult. So, we trust authorities and attack persons. Our chain of reasoning way is invalid, even circular. We generalize isolated cases. Falsifying our claims may be impossible. Our arguments may be contradictory which is called cognitive dissonance.

We need to use evidence based science instead of relying on image marketing. Image marketing appeals to emotions. It uses adjectives, especially fear, threat and danger. Your own product is combined with words perceived as positive and competing products with negative ones. The meaning of the words may be modified

You should be attentive when you see overwhelming number of repetitions and one-sidedness of the view. Everyone says that AI and  robotics are coming. You notice words of understatement like ‘predicts’ and ‘could’ in “Professor predicts 100M could die”.

Furthermore,  you see that title does not match content. It may be just a clickbait. Research and facts are missing. In the worst case there are no facts or facts do support the arguments or perception of the facts is exaggerated. Storm in a glass of water is reported as a global catastrophe.

Proceed Adaptively Step by Step

Because we do not know the outcome in agile uncertain world, we proceed step by step. We adapt after each step because, we cannot make a comprehensive plan. We are moving forward all the time. Error steps are possible and allowed.

Agile leaders are humble servants of others that catalyse the discovery of new problems and better solutions. Life in uncertainty is like life of a scientist and a gardener.

Agile leaders tolerate and appreciate different opinions. Fact-based solutions succeed and bad ideas fail quickly when we have freedom of science and free discussion & communication. Censorship is detrimental to creativity.

References

  1. Kahneman, Tversky: Thinking slow, thinking fast,

2. https://en.wikipedia.org/wiki/Cognitive_bias

Scrum Foundation Quiz

50 questions based on Scrum Foundation 2018 learning objectives.

Select the option that fits agile mindset the best.

Have fun.

Scrum Foundation Questions 1-10

Scrum Theory

Scrum Foundation Questions 11-20

Scrum Theory and Roles

Scrum Foundation Questions 21-30

Scrum Roles and Events

Scrum Foundation Questions 31-40

Scrum Events, first Artifact question.

Scrum Foundation Questions 41-50

Scrum Artifacts and their transparency