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Do Companies Need Tribes, Squads to be Successful in Digital Age?

By Carlos Lau - Kurios
CEO & Co-Founder

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By Carlos Lau | CEO and Co-Founder - Tue, 08/23/2022 - 16:00

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The quick answer to the question in the headline would be: it is necessary, but not sufficient, especially at a time of inflection in which Latin American companies are working daily on digital initiatives to transform and become faster, more flexible, and customer-centric to become relevant players in a digital age that is rapidly evolving, highly ambiguous and competitive.

Currently, more than 40 percent of organizations in the region are prioritizing their digital initiatives, according to the EY report, "Transformation with digital meaning."

But how did we get here? Well, two decades ago, the world's companies began to change their organizational models. Thinking toward the future, a series of pertinent questions were asked within the ecosystem, since the world was changing at the beginning of the 21st century and greater digitization was just around the corner. In general, those questions had to do with how to adapt and prepare for a future that was seen as volatile, while avoiding and creating disruptions.

Soon, companies began to adopt methods, practices, and principles that came from technology and software teams. It was a series of models based on tribes, squads and Agile processes or rituals (Scrum or Kanban, for example). Specifically, Agile positioned itself as the business organization alternative within autonomous and interdisciplinary squads, which made it possible to face continuous change by focusing on the client. In addition to this, leaders and collaborators transformed their mentality.

And, for 20 years, the model of tribes or squads expanded to all kinds of industries and sectors globally. However, the world has changed again.

We live in a key moment in which it is necessary to go beyond Agile; to generate results that impact customers and the business (business outcomes). In other words, as the author Aaron Dignan writes in his book, Brave New Work, “Agile is a mindset, not a set of tools. It's a piece of the puzzle, not the whole thing. It is necessary, but not sufficient.”

Traditionally, the Agile model focuses on being efficient, which is very important, since it allows for maximizing resources and delivering value faster. However, the focus must evolve because being efficient is doing something correctly and when companies focus only on agile rituals, it can result in a high volume of output but not necessarily impact outcomes; that is, impact the most relevant factors: customers and business results. On the contrary, being effective implies determining the why of any initiative, what the client needs and building the product that will address his need and for which, of course, she will pay. In short, to be effective, it is necessary to validate what delivers value to both the customer and the company.

From another perspective, the impact on the client and the business can be summarized with the formula Impact = Environment x Skills, where the environment encompasses the change in mentality and the adoption of Agile. However, the skills factor is missing from the equation.

It is frequently seen that organizations that lack digital talent trained in digital strategy, business and execution skills, could fall into the vicious circle of only producing an efficient volume of work but without business results. Of course, both components are complementary, under the idea that the environment allows a culture to be generated, while skills allow the fruits of success.

Companies must have their teams trained in the appropriate modern business and digital skills. In the end, it is about having better companies and teams that are innovative, adaptable, customer-centric and focused on delivering business results beyond just processes, all within a culture of principles, rather than rituals that become dogma. Going back to the beginning: does a company need tribes and squads to succeed in the digital age? Yes, but that is not enough: they need digital teams trained in digital business skills that deliver Business Outcomes.

Photo by:   Carlos Lau

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