Case Study

Toyota Motors North America: Bringing Agility to a Deep Hierarchy

“We put together a dynamic network of teams from people who live in the hierarchy.
– Dan LeFebvre

Case Study Snapshot

Trainer Name: Dan LeFebvre
Organization: Toyota Motors, North America
Industry: Automotive
Org Size: Large
Date: 2009
Website: Trainer’s website

Learn how S@S Trainer Dan LeFebvre helped Toyota NA achieve an infinite increase in productivity, doing with 25 people over 6 months what 200 people couldn’t do in 5 years 

Summary

Dan LeFebvre is a Scrum@Scale Trainer who helped the IT department of Toyota Motors North America transition away from a traditional hierarchical organizational structure to an agile structure. This case study highlights strategies to smooth such transitions when hierarchical organization is entrenched in the company’s process and culture.

The Traditional IT Department

Before Scrum@Scale was implemented, small pockets of agile teams were deployed sporadically throughout the 4,500 person operation with most of these employees being contractors and outsourced. The agile teams already launched were subsidiary to many layers of management, with information dilution traveling up the traditional chain of decision-making, difficulties in pivoting, and “green shifting” hampering productivity. The “green shifting” phenomena is where projects that start with a red light at the level of the team are slowly shifted to a green light as execution decisions travel up through layers of management. As with the game of telephone, inaccurate diagnostic information about projects is amplified as it is conveyed up through layers of management. And, as is often the case, impediments that are obvious at the team level become obscured by wishful thinking.

The Toyota IT department had already launched collections of agile teams when Dan LeFebvre arrived, but these teams failed to relate well to each other. And, accordingly, the organization’s Scrum of Scrums had difficulty encouraging cross-team coordination. The launched Product Owner teams were in a similar circumstance.

Introducing Scrum@Scale with the “Dual Operating Model”

Because of the entrenchment of the hierarchical organization, the “dual-operating model” from John Kotter’s Accelerate was introduced. According to Kotter, hierarchy naturally forms in large organizations because this structure excels at repeated processes and are stable. They do not excel, however, for anything requiring agility, feedback loops, or quick sensitivity to changing conditions as is often critical for survival in today’s capricious marketplace.

Scrum@Scale was introduced in parallel to the entrenched hierarchy via a network architecture for those projects requiring agility:

  • Parallelism provided extant management with some level of comfort while the organization began to transition. 
  • New, cross-functional agile teams were introduced as “value streams.”
  • Delivery of new products was so successful that management changed their annual planning model within months of initial adoption.
  • Ceased funding modular projects in stages and began funding teams as such.

Changing the Corporate Landscape

Prior to implementing Scrum@Scale, the IT department had 200 employees fail to deliver a product despite spending five years to do so and, ultimately, missing five planned launch dates. Internal metrics of team satisfaction, on a scale from 1 (extremely dissatisfied) to 5 (extremely satisfied), showed an average score of 1.2.

Upon implementation, the original single team of 200 people was reduced to three teams totalling 25 people and delivered their first product within six months of launch. Just as important, the team satisfaction metric jumped to an average of 4. Dan helped drive a sustainable model for their internal metric of 95% agile implementation at scale. He credits the dual-operating model with the success of implementing Scrum@Scale because it convinced decision-makers in this IT department that the extant deep hierarchy could be efficiently transitioned away from.

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