1. Preface
   1. About the title
      1. Management 1.0 = Hierarchies
         1. scientific management
         2. command & control
         3. top-down decision making
      2. Management 2.0 = Fads
         1. add-ons to 1.0
            1. Six Sigma
            2. Balanced Scorecard
            3. Theory of Constraints
            4. TQM
         2. still the same outdated hierarchy
      3. Management 3.0 = Complexity
         1. complexity theory
         2. organizations are networks
         3. organizations as living systems
         4. management is about people and their relations
   2. About the subtitle
      1. Leadership Princes
         1. a leadership prince thinks their position makes them more qualified than others to lead
         2. any person can lead in some way
      2. Leadership Priests
         1. a leadership priest preach a belief in something (like hierarchies, or self-organization) as "good" whereas there is no scientific grounds for that belief
      3. Leadership Pragmatists
         1. Every business needs to be managed on behalf of its owners
         2. a leadership pragmatist understands that hierarchy is a necessity and that the bulk of the work is done in a social network of peers: leaders and followers
         3. Communication flows through the network; authorization flows trough the hierarchy
2. #1: Why things are not that simple
   1. Predictability has a devious sister named complexity
      1. Causality
         1. Casual determinism: future events are necessitated by past and present events combined with laws of nature
         2. it enables us to plan and predict, but it's not enough
      2. Complexity
         1. the same interactions that we can plan and predict frequently turn unpredictable and unmanageable
         2. many events just have to be experienced and observed
         3. Complexity Theory is the scientific way of looking at complex systems
      3. Linear mindset
         1. Our minds prefer causality over complexity, seeing the world as a place full of easily explainable events with simple causes and effects
         2. When it comes to management, causality makes managers look for causes that would produce outcomes exactly as they need them, through careful upfront design, and meticulous top-down planning
   2. The whole and the parts
      1. Reductionism
         1. The approach of deconstructing systems into their parts and analyzing how those parts interact to make up the whole
         2. works well but only to a point: many phenomena behave in ways that can't be predicted by deconstructing them and studying the parts
      2. Holism
         1. the idea that the behaviour of a system cannot be fully determined by its component parts alone; instead, the system as a whole determines in an important way how the system behaves
         2. Reductionism variants connected to the idea of the whole
            1. Greedy reductionism
            2. a form of reductionism where a phenomenon is explained away in favour of understanding its underlying parts
            3. "the whole doesn't exist"
            4. Hierarchical Reductionism
            5. the idea that complex systems can be described as a hierarchy,wherein each level can be described in terms of parts one level down in the hierarchy but not lower
      3. Constructionism
         1. the idea that any system can be constructed once we understand the parts
         2. This is false because even if we fully understand the parts that doesn't mean the whole is the sum of the parts. Knowledge of the parts doesn't imply our ability to reconstruct the higher-level system
         3. we can apply reductionism to trace a problem back to its origins,but we cannot apply a constructionist approach to build a system that prevents such problems from happening in the first place
   3. Management implications
      1. Hierarchical Management
         1. not everything in a complex system can be explained by seeking causes in the lower levels within the system. Each level can have novel and irreducible properties
         2. It means that those who know all about one level of a hierarchical system may be unqualified to deal with lower or higher levels in the same system because those other levels require different kinds of knowledge
      2. Agile Management
         1. Agile software development has roots in complexity theory
            1. casual determinism is insufficient to deliver successful projects
            2. self-organization
            3. emergence
            4. it's impossible to predict failure using a constructionist approach
            5. repeatedly accept failure
            6. subsequently purge causes from the system
         2. We need a theory of management that embraces complexity and linear thinking, to support successful Agile adoption
      3. Management 3.0 model
         1. Energize people
         2. Empower teams
         3. Align constraints
         4. Develop competence
         5. Grow structure
         6. Improve everything
3. #2: Agile Development
   1. Project management and line management are often mixed-up
   2. None of the Agile methods address the role of the line manager
   3. This has led to the problem of line managers being identified as the biggest obstacle to Agile adoption
4. #3: Complex System Theory
   1. The Body of Knowledge of Systems
      1. General Systems Theory
         1. the idea that most phenomena in the universe can be viewed as a web of relationships among elements
         2. these systems have common patterns and behaviors that can be studied to develop greater insight into systems in general
            1. autopoiesis: how the systems constructs itself
            2. identity: how the system is identifiable
            3. homeostasis: how a system remains stable
            4. permeability: how a system interacts with its environment
         3. the recognition that a development team can construct itself, that it can define its own identity, that it needs to interact with its environment, and that the interactions amongst team members are just as important as the team members themselves (or even more so) can all be attributed to systems theory
      2. Cybernetics
         1. a study of regulatory systems that have goals and interact with its environment through feedback mechanisms
            1. acting
            2. sensing
            3. evaluating
            4. back to acting & repeat
         2. from cybernetics we've adopted the view that a software development team is a goal-directed system that regulates itself using various feedback cycles
      3. Dynamics Systems Theory
         1. Dynamic systems have many states, some of which are stable and some of which are not
         2. It helps explain why some projects are stable and why others are not, and why it sometimes it seems impossible to change an organization because it always reverts back to its original behaviour
      4. Game Theory
         1. Multiple systems often compete for the same resource, an in such cases may develop competing strategies
         2. It helps explain the behaviour of people in teams, and the behaviour of teams within organizations
      5. Evolutionary Theory
         1. gradual changes in species and survival of the fittest by natural selection
            1. Random genetic drift: species changing for no reason
            2. Punctuated equilibrium: sudden drastic change, instead of gradual change
            3. Selfish genes: selection at the gene level rather than the organisms or groups
            4. Horizontal gene transfer: species exchanging genes with each other
         2. Evolutionary thinking has helped understanding the growth, survival and adaptation of systems over time
      6. Chaos Theory
         1. Even the smallest changes in a dynamic system can have tremendous consequences at a later time.
         2. This means that behaviour of many systems is ultimately unpredictable
            1. estimation
            2. planning
            3. control
         3. fractals and scale invariance: the behaviour of a system when plotted in a graph looks similar on all scales
      7. Other theories
         1. Dissipative Systems
            1. spontaneous pattern-forming
            2. self-organization within boundaries
         2. Cellular Automata
            1. complex behaviour can result from simple rules
         3. Artificial Life
            1. how information processing works in agent-based systems
         4. Learning Classifier Systems
            1. how genetic algorithms enable living systems to be capable of adaptive learning
         5. Social Network Analysis
            1. how information propagates amongst people in a network
   2. Simple vs Complicated vs Complex
      1. Complexity models
         1. Cynefin
            1. Simple: Best Practice
            2. Complicated: good practice (expert opinion)
            3. Complex: emergent practice
            4. Chaotic: novel practice
            5. Disorder: not knowing which domain you're in
         2. Stacey
            1. degree of Certainty / Uncertainty
            2. degree of Agreement / Disagreement
            3. Simple -> Complicated -> Complex -> Chaotic
      2. Jurgen's Structure/Behaviour model
         1. structure dimension
            1. simple: easy to understand
            2. complicated: difficult to understand
         2. behaviour dimension
            1. ordered: fully predictable
            2. complex: somewhat predictable (with surprises)
            3. chaotic: very unpredictable
         3. Simplification: the act of making the structure better understandable
         4. Linearization: the act of making behaviour better predictable
         5. Simplify everything that's hard to understand, but be careful with linearize it (change the kind of system into another of different behaviour)
   3. Complex Adaptive Systems
      1. a system made up of multiple interacting parts within a boundary, with the capacity to change and learn from experience
      2. They move themselves toward the sweet spot between order and chaos, in a "chaordic process" that's not fully ordered nor truly chaotic
   4. Complexity Thinking
      1. Systems Dynamics
         1. the idea that the structure of organizations, with its many circular, interlocking, and sometimes time-delayed relationships between organizational parts, is often a more important contributor to organization's behaviour than the individual parts themselves.
      2. Systems Thinking
         1. a problem-solving mindset that views "problems" as parts of an overall system. Instead of isolating individual parts, thereby theoretically contributing to unintended consequences, it focuses on cyclical relationships and nonlinear cause and effect within an organization.
         2. asks you to concentrate no problematic systems instead of problematic people
      3. Social complexity
         1. the study of complexity in social systems
      4. Complexity thinking
         1. system dynamics and systems thinking recognize nonlinearity but they are still grounded in the idea that top management can somehow construct a "right" kind of organization that can produce the "right" kind of results
         2. To manage social complexity, managers need to understand how things grow, not how they are built
         3. complexity thinking assumes that managers cannot construct and steer a self-organizing team. Instead, such team must be grown and nurtured
5. Energizing People
   1. #4: The Information-Innovation System
      1. Innovation is key to survival
         1. complex adaptive systems actively seek a position between order and chaos because innovation and adaptation are maximized when systems are at the "edge of chaos"
         2. Innovation is typically a bottom-up phenomenon
         3. Innovation is not a planned, but emergent result
      2. 5 Cogs of Innovation
         1. Knowledge
            1. Knowledge is built from the continuous input of information from the environment
            2. education & learning
            3. requirements & requests
            4. measurement & feedback
            5. steady accumulation of experience
            6. people's expertise is not the most important indicator of their performance. Instead, what actually makes the difference is their connectivity in the organization
            7. most knowledge is tacit
            8. sharing occurs through "osmotic communication"
            9. it's imperative that our software teams consist of people who want to share and work together
         2. Creativity
            1. creativity is primarily based on people's knowledge and combination of dissimilar ideas
            2. creativity manifests itself in the production of things that are both original and useful
            3. The Art of Thought
            4. Preparation
            5. Incubation
            6. Intimation
            7. Illumination
            8. Verification
         3. Motivation
            1. the act of "energization" of goal-oriented behaviour
            2. desire or at least readiness
            3. system that continues to energize people, rather than take away energy from them
            4. fine example of social complexity
            5. nonlinear
            6. unpredictable
            7. Maslow's Hierarchy of Needs is flawed because it makes motivation look straightforward and linear
         4. Diversity
            1. Diversity can stabilize a system and make it resilient to environmental changes
            2. It means that in complex systems you can't use averages
            3. Homophily: the tendency of individuals to associate with similar others
            4. Managers hiring look-alikes
            5. selfish gene theory
            6. Inclusive Diversity: There has to be some balance and sufficient common ground so that all diverging views are still connected in a bigger pattern
         5. Personality
            1. Values & Virtues
            2. So called "agile values" are in reality "human virtues": personality traits that we value as being good
            3. virtues determine people's behaviour and have big consequences for motivation
            4. knowledge can only lead to innovation when people's personalities adn motivations are properly addressed. That's why virtues are important
            5. projects will benefit from some virtues being shared by all team members. But creativity also benefits from diversity of personalities (and virtues)
            6. As a manager *you should pick* your own set of human virtues to focus on in your teams
      3. Only people are qualified for Control
         1. Law of Requisite Variety
            1. a system can be controlled by another system only when the other system is just as complex or more complex than the first one
         2. People are the most complex elements in a software project.
         3. Processes and tools cannot outperform their masters; they are like sensors and emitters
   2. #5: How to Energize People
      1. Manage a creative environment
         1. Safety
         2. Play
         3. Variation
         4. Visibility
         5. Edge
      2. Motivation
         1. Extrinsig
            1. Becomes a problem with people are unaware of their dangers
         2. Intrinsic
            1. self-determination theory
            2. Competence
            3. Autonomy
            4. Relatedness
            5. 10 desires
            6. feel competent
            7. feel accepted
            8. curiosity
            9. honor
            10. idealism (purpose)
            11. independence (autonomy)
            12. order
            13. power (influence)
            14. social contacts (relatedness)
            15. status
      3. Demotivation
         1. Two-Factor Theory
            1. Hygine factors
            2. Motivatos
         2. You can't motivate a person by removing demotivation factors
      4. Diversity means "connectivity"
         1. performance also depends on the person's connectivity with other people in the social network
         2. when hiring, watch out how this new person will connect to other people in the organization
         3. You want these connections to be of a different kind than the connections the existing team members have established
      5. Personality Assessments
         1. Different tests
            1. 16 Pesonality Factors Questionnaire
            2. MBTI
            3. Enneagram Program
            4. Big Five Factors of Personality
         2. Doing and assessment
            1. 1. take the test yourself
            2. 2. share the results with your teams
            3. 3. ask people to take the test privately
            4. 4. (optional) suggest that team members share their results
            5. must be voluntary
            6. requires high trust
         3. Team Values
            1. a good list of team values originates from the team and its environment
            2. consensus with management (the environment) on the final list can be vital
         4. Personal values
            1. start by measuring yourself against the same values hat were selected by the team
         5. "No Door" policy
            1. the "Open Door" policy communicates distance
            2. we need a different policy that emphasizes that managers should not be separated from other kinds of employees
6. Empower teams
   1. #6: The Basics of Self-Organization
      1. Self-organization is the process where a structure or pattern appears in a system without a central authority or external element imposing it through planning
         1. It's the default behaviour of a dynamic system, not a "best practice"
         2. No matter how you manage a team, there will be self-organization
         3. the question really is: "is it in the right direction?"
      2. Nature of Self-organization
         1. No self-organizing system exists without a context. And the context constraints and directs the organization of the system (what the system can and cannot do)
         2. command-and-control is just a special case, where there's an attempt to lock in strict constraints
         3. self-organization vs Anarchy
            1. Anarchy = "having no ruler"
            2. Absence of order (chaos)
            3. This is what most people think "anarchy" is
            4. Absence of authority
            5. may result in complexity: order, but not imposed by an authority
            6. A better spectrum is: Governance <---> Anarchy
            7. Order
            8. Complexity
            9. Chaos
            10. The real issue people have with anarchy is that such unmanaged systems can behave in a way that stakeholders don't value (i.e. their way of self-organizing is not appreciated by their primary stakeholder.)
         4. self-organization vs. Emergence
            1. Emergent properties
            2. a property of a system that cannot be traced back to any of the individual parts of the system
            3. Three aspects
            4. Supervivence (global): the property will not exist if you take away any part of the system
            5. Not an aggregate (irreducible): the property is not the result of adding up properties of the individual parts
            6. Downward causaility (noticeable): the emergent property influences the behaviour of individual parts
            7. Emergence in Teams
            8. the possiblity of collective decision making without central planning
            9. synergy: the whole is more than the sum of the parts
            10. the nature of emergent properties is often unpredictable, being the result of the interaction between team members
         5. other (related) terms
            1. Self-managed
            2. the team organizes its own activities
            3. roughly equivalent to "self-organized", but rather ambiguous (self-organized is better)
            4. Self-selected / Self-designed
            5. the team is self-organizing and creates and maintains itself
            6. Self-directed / Self-governed
            7. the team is self-selected and there is no outside management
            8. a team can be self-rganizing, but not allowed to be self-directing
      3. Darkness Principle: "each agent on a system is ignorant of all behaviours of the system"
         1. each team member can only have an incomplete mental model of the whole project. That's why they have to plan and decide together
         2. the move towards self-organization occurs because it is a way to increase control over uncertainties
         3. managers are "in charge" but not "in control"
      4. Conant-Asby Theorem: "every good regulator of a system must have a model of that system"
         1. when we want to control something, we need a model for it
            1. control can be only as good as the quality of the information available form the system
            2. the more complex a system is, the less capable we are to model it
            3. available information is too complex to comprehend
            4. available information is not enough to construct a proper model
         2. the more complex a system is, the less we can control it
         3. Delegation of control is ta manager's way of controlling complex systems.
            1. You push decisions and responsibilities down to a level where someone has information that is smaller in size and more accurate
      5. Distributed Control & Empowerment
         1. A single controlling authority makes a system neither robust nor resilient
         2. The way to distribute control in an organization is through empowerment
         3. The reason to empower people is not to improve motivation, but to improve manageability
      6. You are (like) a gardener
         1. living systems grow fast at the beginning and then reach a level of maturity. Mature systems don't need to be looked after as often as young systems
         2. When a garden (system) is not managed, it will keep growing but in another direction that was intended. The result might not be as pretty as you had hoped for.
         3. Many growing systems have a life expectancy. There comes a time to replace the old with the new
   2. #7: How to Empower Teams
      1. Delegation
         1. Don't create motivational debt
            1. People don't want to be told what to do. They want to be asked.
         2. Distinguish Empowerment rom Delegation
            1. Delegation == the act of handing over responsibilities
            2. Empowerment includes support of risk taking, personal growth, and cultural change
         3. Choose the right maturity level
            1. Being empowered is a skill
            2. It must be learnt, and it takes discipline to maintain
            3. the intention is to get everyone to the higher level
            4. people should be allowed to "earn" the higher levels of empowerment by proving that they have mastered the lower levels
            5. classify your activities
            6. Low Empowerment
            7. activities that have no far-reaching consequences for the organization
            8. Moderate Empowerment
            9. self-organization
            10. Agile development assumes this level
            11. High Empowerment
            12. self-governance
            13. organizations at this level were usually created this way from the start
         4. Pick the right authority level
            1. Empowerment is not a binary choice; rather, it depends on the level of authority
            2. 7 Levels
            3. I decide
            4. 1. Tell
            5. no empowerment at all
            6. 2. Sell
            7. you decide, then you need to get commitment from them
            8. 3. Consult
            9. ask first, then you decide
            10. We decide
            11. 4. Agree
            12. joint discussion
            13. your voice is equal to theirs
            14. They decide
            15. 5. Advise
            16. you attempt to influence
            17. 6. Inquire
            18. they convince you after deciding
            19. 7. Delegate
            20. you leave it entirely to them
            21. Vary the level of authority depending on the topic; go up in the levels as the team grows
         5. If you want something done, practice patience
            1. The Micromanagement Trap
            2. micro-management often prevents workers from being able to self-manage or otherwise show that they could handle more authority
            3. workers continue to work in a dependent way, trapping you into keep making all the decisions
            4. "they are not ready for this" leading to "if you want something done, do it yourself" leads to the trap
            5. Treat delegation as an investment: it needs time to mature
            6. When something bad happens after you delegate something to workers, do not take back responsibility for the task. Instead, take responsibility for the way you've delegated it
            7. When there's pressure from top management to "get things under control", realize that what you need to get under control is your method of delegation
            8. Consider the Delegation Checklist
            9. Resist the urge to "be on top of things"
         6. Address people's Ten Intrinsic Desires
            1. Once you found what motivates people, choose to delegate the kind of work that most closely matches peoples desires
         7. Make sure the environment is supportive
            1. Are the policies, procedures, etc. in line with the level of delegation?
      2. Trust
         1. Trust the Team
            1. When an empowered team asks you to decide, find ways to have them solve the problem themselves
            2. Be a mirror
            3. Help them with their thinking process
            4. When a team members asks you to do something that you have delegated, tell them that trust is meant to be transitive: you trust the other person to do it, and so should them
            5. Never betray trust you have given
            6. When nobody comes up to you to decide, don't criticize them for not consulting
            7. If you want to be consulted, set that expectation up-front
         2. Earning Trust
            1. deliver on your promises
            2. do what you have committed to
            3. Aim to be predictable pleasant
            4. trust suffers when people are either predictably unpleasant or unpredictable pleasant
         3. Helping people trust each other
            1. When trust is low, focus on communication and commitment
            2. Increase the bandwidth and quality of their communication
            3. Assist individuals in doing what they promised to do
         4. Trust yourself
            1. stay true to your own reason and common sense
            2. change your mind when new insights have convinced you
      3. Respect
         1. Stop associating delegation with importance
         2. Ask for feedback
         3. Give feedback
7. Align constraints
   1. #8: Leading and Ruling on Purpose
      1. Boundaries and Direction
         1. Organizations live in the "edge of chaos"
            1. Complex adaptive systems are systems that can find their own way towards that sweet spot of complexity, right between order and chaos
            2. they change the rules as they evolve
         2. The question then is who or what is tuning the rules in an organization so that the organization moves toward (and stays at) the edge of chaos
            1. A manager's job is not to create the amount of rules in the organization.
            2. Instead, it is to make sure that the people can create their own rules together, configuring high-level parameters rather than low-level "rules of the game"
            3. diversity
            4. information flow
            5. connectivity
            6. The manager defines the boundaries, but not the rules: doing otherwise negates the concepts of self-organization and emergence
         3. But self-organization is not enough
            1. a little management is needed to steer self-organization in a direction that it's valuable for everyone in the system (alignment of constraints)
            2. managers must make it safe for people and their shared resources to self-organize
         4. A boundary is what defines the "Self"
            1. what will emerge will be strongly influenced by the boundaries and constraints
            2. directed self-organization in business is a matter of manipulating the constraints so that a group of people produces results that are valuable to the organization as a whole
      2. 3 responsibilities for managers
         1. 1. Develop the system
         2. 2. Protecting the system
         3. 3. Directing the system
      3. Leadership
         1. Management vs. Leadership is nonsense
            1. makes more sense to compare leaders to rulers
            2. both are behavioral styles within the job we call management
         2. Leadership vs. Governance is the right distinction
            1. leaders use the power of attraction to convince people
            2. rulers use the power of authority to tell people what to do
         3. Part of a manager's role is to decide how much to lead and how much to rule
         4. Types of leadership
            1. Administrative (rulers)
            2. Emerging (leaders)
            3. Enabling (allowing non-managers to lead)
      4. Purpose
         1. 3 kinds
            1. intrinsic purpose
            2. comes "naturally" to the system
            3. extrinsic purpose
            4. assigned, or given, to the system by its owner
            5. autonomous purpose
            6. assumed by the system (what it "wants")
         2. Team purpose
            1. purpose can be seen as an emergent property of the system
            2. "shareholder value" is not the goal of the organization, but of individual stakeholders
            3. people in the team (management included) have their own personal goals
            4. neither customer nor team members nor management can automatically promote their own goals to the entire project team
            5. the intrinsic purpose of a software team is to produce software
            6. the team can define its own autonomous purpose
            7. management is responsible for assigning the team an extrinsic purpose
            8. it sets direction for self-organization
            9. it's a manager's responsibility because the manager is the only one responsible for the whole system
   2. #9: How to align constraints
      1. Give people a shared goal
         1. A manager is responsible for defining a shared goal across a group
            1. defining a purpose enables a manager to unite and motivate people
            2. a goal gives people an awareness of their context
            3. A shared, extrinsic purpose transcends any goals of individuals or subteams within the group for which the manager is responsible
            4. Elevating any of these stakeholder's goals to the group level would lead to suboptimization and dysfunctional measurements
            5. The criteria for goals must depend on context
            6. SMART is too simplistic
            7. pick from the Agile Goal Checklist
            8. dangers to stay away from
            9. intimidation
            10. impressing stakeholders
            11. favouring short-term wins over long-term losses
            12. distracting by focusing only on actions
            13. having too many goals
            14. connecting goals to rewards
            15. Goals are allowed to change more than once per year
         2. Communicate your goal
            1. A goal works only when people in the system use it to evaluate their actions
            2. talk to people about your goal and review their actions in the context of the goal
         3. Vision vs Mission
            1. vision statement
            2. what the future organization wants to be
            3. it's about the future; the desired end-state
            4. it's inspirational
            5. it provides clear decision-making criteria
            6. define it for businesses, projects, products
            7. mission statement
            8. tells you the fundamental purpose of the organization
            9. it's about the present; about how to get to the desired end-state
            10. it informs of the desired level of performance
            11. define it for groups and teams
         4. Allow your team an autonomous goal
            1. Not all teams can come up with one
            2. you can ask them about it, but never tell them do create a goal
            3. If they do, allow them that freedom; don't override it
            4. in case of conflict, there has to be a compromise
            5. autonomous goals and extrinsic goals do not override each other
            6. overruling the team will incur a significant motivational debt
      2. Creat a Boundary List of Authority
         1. "discovery of invisible electric fences"
            1. when managers "empower" people, often don't give them clear boundaries of their authority
            2. people then have to find out by trial and error, incurring some emotional damage along the way
         2. create a list of "key decision areas", combined with the autority level and the choice of authorizing individuals or teams
      3. Protecting People and Resources
         1. Watch for mistreatment amongst colleagues
            1. Asking "are you being treated well" is not likely to result in an honest answer
            2. instead
            3. ask people who their friends are
            4. ask people about how they thing other people are being treated
         2. someone outside the team (management) must keep an eye on long-term sustainability instead of short-term individual gains
         3. Watch for the "Tragedy of the Commons"
            1. a situation in which multiple self-organizing systems, all of them acting in their own self-interest, overexploit a shared limited resource, even when they all know it is not in anyone's interest for this to happen.
            2. 4 ingredients for sustainability
            3. Institutions (managers) building trusting relationships between systems (teams)
            4. Information that increases understanding of the environment
            5. Identity (social belonging) to improve sense of community and reduce competition
            6. Incentives punishing overuse and rewarding responsible use
      4. Constrain Quality
         1. Quality is often simply assumed by everyone
         2. you not only get what you ask for, but also don't get what you don't ask for
         3. Managers have to define clear constraints for quality in their products
      5. Create a Social Contract
         1. groups of people maintain social order by giving up some of their freedoms to an authority
         2. the contract lists the obligations of the authorities toward the people, and everyone is automatically assumed to agree on the contract, or else they are fee to leave
         3. the contract should address the basic needs of people
8. Develop competence
   1. #10: The Craft of Rulemaking
      1. Learning systems can be modeled ad complex systems consisting of competing rules
         1. Learning Classifier Systems
            1. Performance System
            2. many potentially conflicting rules
            3. rules are triggered under different circumstances given different stimuli from the environment
            4. rules are both competing and collaborating with each other
            5. "fittest" rules are those that contribute most effectively to the whole
            6. Credit Assignment
            7. rules that appear to lead to improved performance of the entire system are credited, increasing their strength within the performance system
            8. the strength of a rule increases the chance of being triggered the next time for similar input messages
            9. when the environment changes, strong rules start failing and weak ones could succeed more often than before, allowing the system to adapt
            10. Rule Discovery
            11. new rules can be constructed from existing rules by recombination of building blocks
         2. Sometimes "rules" is used when we mean "constraints", but those are different
            1. A rule tells you what to do given an input
            2. A constraint sets a boundary
            3. In complex adaptive systems, its agents can manage their own rule making process. Managers restrict themselves to setting constraints and allow the performance system in their team members to kick in and use their innate problem solving potential
            4. The more you're imposing fixed rules, the more you are constraining the innate rule-making capabilities of your team members
         3. Diversity of Rules
            1. People should be allowed to do things their own way, to keep them motivated
            2. Competing rules can strengthen the whole, since diversity increases flexibility and resilience
      2. The development of rules in a team is a matter of competence
         1. The Agile Blind Spot
            1. Agile doesn't explicitly recognize the need for smart, attentive, disciplined people
            2. Therefore, management needs to figure out how to address this
         2. Craftwmanship is important
            1. We can learn practices from various sources. But it is our personal choice to seek them out and to apply them. it's not the number of official rules in an organization that makes the difference
            2. Management must stimulate craftsmanship and discipline
         3. Competence has two dimensions: Discipline and Skill
      3. Rules should be created at the level of the lowest competent authority
         1. Subsidiarity Principle
            1. matters should be handled by the smallest, lowest or least centralized competent authority
            2. Rules are the responsibility of individual workers, unless they cannot perform their tasks effectively, in which case rules need to be established at the next higher level in the hierarchy
            3. This allows the free flow of ideas and practices within the boundaries of effectiveness
         2. rulemaking should be delegated to the (competent) team
      4. Sometimes rules should be discarded
         1. Risk Perception and False Security
            1. in situations without rules and guidance, people feel compelled to take responsibility and to judge for themselves
            2. Existing rules have to be treated not as laws but as rules of thumb
            3. Sometimes is necessary to abolish rules to prevent people from following blindly
         2. having too many rules invites feelings of false security and a tendency to risk compensation
      5. Behaviour will be copied around and amplified by feedback loops
         1. Memetics
            1. Memes: ideas, concepts, beliefs, theories, ideologies
            2. Memplex: collection of interdependent memes
            3. Memes group together in a memplex because they will copy themselves more successfully when they are taken as a group
            4. Memes reinforce each other to be copied around in the minds of people
            5. Agile practices form a memplex
            6. it can be easier to adopt multiple ideas simultaneously than it is to have them adopted one by one
            7. not all practices need to be beneficial. some can even be harmful, but when taken together bad effects are neutralized
            8. removal of individual memes from the memplex may weaken, or even destroy, the strength of the memplex
            9. there may be multiple competing memplexes that reinforce and need each other because their competition draws attention away from alternatives
            10. Memes may have different origins and can even be exchanged and shared across multiple memplexes
         2. Broken Windows
            1. Behaviour is a function of a person and their environment
            2. people tend to adapt their behaviour to the environment that they live in
            3. people also tend to copy each other's norms and behaviours (memetics)
            4. reinforcing feedback loops can lead to bad (or good) behaviour leading to more bad (or good) behaviour
   2. #11: How to develop competence
      1. 7 approaches
         1. Self
            1. factors that enable self-discipline
            2. the realization that something is important
            3. basic time management skills
            4. mechanisms to avoid forgetting
            5. motivation
            6. you must show self-discipline if you want people around you to have it too
         2. Coach
            1. coaches / mentors
            2. competency leaders
            3. responsible for setting standards and developing people
            4. the most important role is that of a teacher, who guides the purposeful practice necessary to develop expertise
         3. Tests
            1. consider certification
            2. certification may lead people to believe they have a formal level of competence
            3. it can, however, have a positive effect when combined with other measures
         4. Tools
            1. tools need to be not just configurable, but adaptable
            2. tools can make the process mistake-proof
         5. Peers
            1. social pressure is an example of a positive feedback loop
            2. 3 things to make it work
            3. works only when people want to be part of the group
            4. requires direction in the form of a goal
            5. let self-organization do its work
         6. Supervisors
            1. two sides of the coin
            2. zero defects
            3. preventing problems instead of fixing them is cheaper
            4. inspection (supervision)
            5. zero defects is unattainable because those last few problems are too expensive to fix up front
            6. there's no way to "mistake proof" some practices, so an assessment may be a better choice
         7. Managers
            1. leading and governing
      2. Metrics
         1. Optimize the whole
            1. Multiple levels
            2. what you measure has to cover everything; the unmeasured, unconstrained parts of the system will self-organize towards suboptimal results
            3. This doesn't mean moving all metrics to the higher organizational level: use a combination of metrics that leave no gaps
            4. a metric for individual performance is fine if and only of it is augmented with metrics at the team level
            5. a metric concerning individual teams is fine if and only if supplemented with metrics for the entire business unit those teams are part of
            6. Multiple dimensions
            7. measure multiple perspectives simultaneously
            8. 7 possible dimensions
            9. Functionality
            10. Quality
            11. Tools
            12. People
            13. Time
            14. Process
            15. Value
         2. when measuring performance
            1. Distinguish skill from discipline: evaluate both, but separately
            2. Do not rate knowledge or experience: instead, focus on delivery
            3. Rate multiple (different) activities
            4. Rate multiple performances: we all have bad days
            5. Use relative ratings: people can strive to do better each time, rather than hitting a target and staying there
            6. Keep the fieedback loop as short as possible: as little delay as possible between action and measurement
            7. Use both leading and lagging indicators
            8. Never create the ratings yourself: have the metrics produced by the environment
      3. Feedback for people
         1. One-on-Ones
         2. 360 meetings
      4. Grow standards
         1. Different parts of a complex system will try to optimize for themselves. Therefore, local systems will switch to global standards when it is optimal to do so.
         2. This means that standardization is not something that needs to be enforced
         3. self-organizing teams can manage their own internal standards
         4. bottom-up standardization will happen when goals and metrics make it clear that it is more optimal for them to change
      5. Work the system, not the rules or the people, by setting the right constraints
         1. Allow standards for competence to emerge through positive feedback loops
         2. Introduce memeplexes instead of individual ideas to accelerate adoption of good practices
         3. Allow people to have "barely enough" competence levels some areas so they can focus on the things they are good at, exploiting different talents and letting them compensate for their weaknesses
         4. Big problems start as small problems: don't focus only on big problems
9. Grow structure
   1. #12: Communication on Structure
      1. Communication is normally understood as passing a message from a source to a target, but it's really more involved than that
      2. Communication occurs through a social network
         1. Communication = information * Relationships * Feedback
            1. Messages are often distorted by the medium before they reach the target
            2. miscommunication is really the norm
            3. real communication includes making sure the meaning assigned to the message is the same on both sides
         2. A social network is a complex system with people who communicate with various capabilities levels in 9 areas
            1. Connecting: creating pathways through which communication can potentially happen
            2. Filtering: knowing what to listen to and what to ignore
            3. Empathizing: creating emotional association with the message
            4. Understanding: knowing what the message means
            5. Developing: adding new information
            6. Managing: categorizing and evaluating
            7. Boadcasting: radiating information
            8. Influencing: prompting change in others
            9. Conversing: exchanging ideas with other people
         3. Network effects
            1. tipping point: the moment when something rare becomes widespread
            2. strength of weak ties: information spreads more strongly through many weak connections instead of a few strong ones
            3. long tail: the sum of the value of sparsely available information can be larger than the value of stuff that is ubiquitous throughout the network
            4. homogenization: what's popular becomes even more popular (gets copied more)
      3. Optimizing Communication
         1. Tuning Connectivity
            1. information overload is never the problem: our brains are naturally wired to ignore almost everything we receive
            2. The real problem is when people's filtering capabilities are untrained so that they listen to the wrong things and ignore other good stuff
            3. Complex systems can find their own optimum when dealing with communication; no governance is needed (or even possible)
            4. A reasonable thing for a manager to do is to influence which information is available, which connections are formed and how well trained he sensory filters are
         2. Competition and Cooperation need to go hand in hand (guided by self-interest)
         3. the result can be auto-catalytic
            1. a system in which agents reinforce and accelerate each other's productivity
            2. almost inevitable when diversity and connectivity are increased in a network
            3. it's what we call "hyper-productivity" or "jelled" teams
         4. The structure of the organization contributes heavily
            1. scale-invariant structures are efficient and require only a few rules
            2. scaling out (growing many small parts) works better than scaling up (growing one big system)
   2. #13: How to grow structure
      1. Organizational structure will change over time
         1. factors in organizational structure
            1. the organizational environment
            2. the products (Conway's Law)
         2. Changes in the environment, product types, company size, people, all lead to (or should lead to) changes in the organizational structure
      2. Strategies for organization adaptability
         1. Consider specialization first, and generalization second
            1. teams of specialists perform better than teams of generalists
            2. but specialization has problems
            3. bottlenecs
            4. stagnation
            5. look for T-shaped people
         2. Widen people's job titles
            1. for improved organization adaptability, it helps not to lock up responsibilities in job titles. Instead, keep titles as widely applicably as possible
            2. job titles can be used as formal boundaries for informal roles
            3. People should specialize in something, but they must be flexible enough not to claim exclusive job titles in support of their specialization
            4. Have small set of job titles and perhaps a few guidelines on which informal roles go with each job title
         3. Cultivate informal leadership
            1. support emergent leadership positions, but refrain from directly assigning such roles yourself
            2. Many teams tend to flounder when there's no strong leadership. You may need to push them and help them solve their leadership problem, but allow them to decide
            3. Abstain from having a "management layer" (Chief Something, Lead Whatever) as a wau to make easier for organizations to add and remove them on demand
            4. If the role was a formal job title, the person would have to be kept busy, or fired for lack of work
      3. Watch Team boundaries
         1. 3 aspects of boundary management
            1. the way teams are structured
            2. self-selection is an option to consider
            3. define and discuss constraints on team formation first
            4. size
            5. diversity
            6. other parameters
            7. how individuals relate to teams
            8. try to make sure every person is dedicated to one team
            9. how teams change over time
            10. teams perform better when they are long-lived
         2. The optimal team size is 5 (maybe)
            1. but this is highly dependent on the environment, people, project, etc.
            2. do not impose a "preferred" team size; instead, add some constraints (like upper boundary in size), with a suggestion to have 5+/-2
         3. Functional vs Cross-Functional Teams
            1. For projects, cross-functional teams are more suitable
            2. Most communication is oriented around the business, not around the function
            3. But they have downsides
            4. sub-optimization at the project level
            5. inefficiencies around coordination across projects
            6. reduced expertise because of limited knowledge sharing across specialists
            7. Both team types require coordination
            8. Functional silos have a high interaction penalty; cross-functional teams pay the penalty for synchronization of standards, methods and approaches
            9. Cross-functional teams require coordination about practices, standards, shared resources, etc.
            10. Coordination across teams
            11. 2 patterns
            12. 1) people who are positioned one level above the team take care of coordination
            13. 2) teams take care of coordination across their boundaries
            14. pattern #2 can lead to "patches" of self-organizing teams, solving a big problem together
            15. Start with #2 and fall back to #1 when it doesn't work (for example, when competence hasn't been resolved yet.)
            16. Facilitate a gradual move towards cross-functional teams that apply #2
            17. Local optimization issues
            18. Functional teams tend to optimize their own efficiency, even if it hurst the business
            19. Cross-functional teams optimize delivery, but it can also hurt the business in the form of lack of uniformity and standards
            20. Turn eachteam into a little Value Unit
            21. both functional and cross-functional teams should see themselves as delivering value to a customer, no matter whether it's internal or external
            22. Sometimes is better to move specialist work to (functional) specialist teams
            23. It's matter of balancing communication when the need of specialists talking to each other outweighs the need of interacting with team members working on value delivery
            24. 5 important considerations
            25. an interface between the cross-functional team and the specialist team needs to be clearly defined
            26. specialist teams need to see themselves as value units, serving the project teams, not controlling them
            27. project teams should decide whether the specialist team is actually delivering any value
            28. teams and their management will have to figure out how many points of contact with other teams they can handle
            29. the team of specialists can be virtual instead of physical (CoPs for example)
      4. Management hierarchies
         1. Acknowledge that information flows through the network and not through the hierarchy; the hierarchy is needed for authorization, and the network for communication
         2. each management layer needs to add value, doing something the layers below can't do for themselves
         3. there needs to be some "separation of concerns" between management layers
            1. spacial
            2. temporal
            3. others?
         4. Hybrid Organizations
            1. mixture of functional and cross-functional teams, hierarchies and networks
            2. matrix organization is a form of hybrid; it can work if properly implemented: when there's one and only one line of authority, flowing through the hierarchy of line managers
            3. a "panarchy" is a system of overlaping networks of collaboration and authority
            4. there are many sources of authority and individuals choose to subject themselves to rules and norms of any group they decide to participate in
      5. Designing how information flows through the structure
         1. Have no secrets
            1. when people lack information, they invent it themselves
            2. make information available and accessible
            3. it's particularly important to make everybody understand what the organization's financial performance is
         2. Make everything visible
            1. people copy each other's behaviours, sometimes for no reason other than just seeing them
            2. use mimicry to your advantage by making sure good behaviour is visible
            3. use "information radiators" and "big visible charts"
         3. Connect people
            1. resilience and innovation in an organization are the result of people having a good relationship with each other so that information flows freely and undistorted
            2. it doesn't mean that you need to be close friends with everyone, but knowing a little about their life is a good start
            3. remove cubicle walls
            4. facilitate informal meetings (coffee breaks, lunch)
            5. stimulate that people enjoy each other's company at lunch or dinner
      6. Aim for Adaptability
         1. you need to work on your organization's ability to change
         2. complex adaptive systems constantly change and rearrange their building blocks as they gain experience
         3. organization adaptability calls for minimum specification of organization
10. Improve everything
    1. #14: The Landscape of Change
       1. Environment
          1. The environment that a system experiences is not the same environment that would exist if the system weren't there
          2. "Caminante no hay camino, se hace camino al andar"
          3. We first have to experience how the environment responds to a new system before knowing how to operate in it
          4. The environment then decides how to deal with the "intruder"
       2. Uncertainty
          1. There's a pattern of uncertainty woven into the fabric of reality (Heinsenberg Principle)
          2. sensitivity to uncertainty in initial conditions can have far-reaching consequences (Butterfly Effect)
       3. Success & Fitness
          1. Success is the continued absence of failure
          2. Fitness is the ability of a system to exist and to prosper
          3. A system's fitness depends not on intrinsic characteristics, but in its ability to meet the requirements of its environment
          4. A complex system needs continuous improvement not to avoid the chance of failure, but simply to maintain its current fitness, relative to the other systems it's co-evolving with
          5. 3 approaches for Continuous Improvement
             1. Adaptation (looking backward)
             2. Undirected
             3. random selection
             4. found in biological systems
             5. natural selection comes to the rescue
             6. Directed
             7. conscious selection
             8. found in human systems, where it mixes is unintentional undirected adaptation
             9. Exploration (trying things out)
             10. Anticipation (looking forward)
       4. Attractors & Convergence
          1. We can visualize the change of a complex system as different states through a space
          2. An Attractor is a stable situation towards which another states lead to
          3. The collection of all trajectories that "converge" to an attractor is its "Basin of attraction"
          4. Most perturbations have no serious effect on the system
             1. the system stays in the attractor
             2. the system is pushed out of the attractor, but within the same basin of attraction
          5. Only when variables are pushed far enough will the system be pushed from one basin of attraction to another, thereby ending in another attractor
          6. The basin of attraction can be big enough to cause the system to be "stuck" in the attractor. In this case, a better strategy may be to change the environment so that the current situation becomes unstable and disappears all by itself.
       5. The Fitness Landscape
          1. The fitness landscape represents how good the performance of the system is, relative to its current state
          2. An "adaptive walk" is the process by which a system changes from one configuration to another to stay fit
          3. Because of changing environments, and co-evolving systems, the fitness landscape is never static: you need to continuously re-evaluate your strategy
          4. The shape of the landscape is related to the interconnectedness of the system
             1. high interdependencies generate a rugged landscape, in which is very difficult to achieve optimal fitness
             2. With fewer, loosely-coupled interdependencies, continuous improvement is possible without the fear of falling down a cliff at every step
    2. #15: How to Improve Everything
       1. Most improvement approaches are linear (step-by-step), but most landscapes usually are not that accomodating and require non-linear, big jumps
          1. pattern for gradual improvement (kaizen)
             1. 1. analyze the current situation
             2. 2. define a goal
             3. 3. define a metric
             4. 4. identify an improvement
             5. 5. realize an implementation
             6. 6. execute
             7. 7. measure
             8. 8. learn & repeat from 1
          2. It's assumed that each iteration should lead people to a better position in the fitness landscape, with higher fitness each time.
          3. it's easy to get stuck in a local optimum: every step from there, even though in the right direction, will first make things worse
          4. When that happens, radical improvement (kaikaku) may be requried
       2. Travel tips for the Wobbly Landscape
          1. From a valley, you can often see only the mountains around you, and not the (sometimes higher) peaks behind them.
          2. The longer it takes you to travel to another peak, the higher the chances that it will be gone by the time you arrive
          3. You probably can't see the best peaks. But you should try to understand where the mountain ranges are
          4. You can trust each peak will be high. (if you want to climb, you will get higher.)
          5. Only when you reach the summit of a peak, it can be easier to see which of the other peaks is really the highest
       3. Changing the environment
          1. managers have the power to change the environment in ways that make it easier for teams to achieve better performance
          2. The most significant change in the environment is turning it into one that invites rather than subdues continuous change
             1. create a culture of comfort despite the uncertainty that comes with change
             2. make change the default organizational behaviour; standing still is the exception
             3. don't talk about "reorganization"
             4. don't give then change initiative a name
             5. all this emphasizes that change is special, with a beginning and an end
             6. be careful with pilot projects
             7. pilot projects are carried out in separate and safe "sandboxes"
             8. sandboxes are for learning without dangers, but sending out scouts is to learn about dangers
          3. Make change desirable
          4. Make stagnation painful
             1. the perceived value of change is proportional to the pain that a person experiences when not changing
             2. Turn up the heat and make sure people feel a reason to change
          5. Honor thy errors
             1. when errors have no important or immediate effect, they enable a system to acquire crucial knowledge for unexpected situations
       4. Strategies for optimal performance
          1. Noise
             1. Introduce mutations: change in an individual practice
             2. this is the equivalent to performing step-by-step changes
          2. Cross-over (sex)
             1. recombine best practices, under the assumption that peaks in a rugged landscape tend to cluster around each other
             2. this is the equivalent of making (big) jumps
          3. Broadcasts
             1. learning from others and copying practices
       5. Avoid "copy-paste" improvement
          1. adoption "by the book" needs to be followed by a learning process on how to tune the standard to the local context
          2. sometimes, significant adaptation is required before adoption
       6. Practical Tips
          1. Use regular retrospectives, at multiple organizational levels
          2. Maintain an improvement backlog, at multiple levels
             1. reserve some capacity in people's schedules for continuous improvement
          3. Use an explicit multi-step improvement cycle
          4. Setup a transition team
             1. the goal if this team is to be the champions of change: guide people in their transition, rather than imposing change on them
          5. Learn about Kanban
          6. Suggest people start their own improvement communities