The typical model of business needs rethinking. Traditionally, businesses run in a rather industrial structure, almost militaristic. There are layers upon layers of management, with large gaps between the people who do the work and those who control the strategy. While this can work well in certain sectors, like manufacturing, it’s not ideal for a more innovative company.

So we talked to Bob Ritchie, VP of Software at SAIC, about an alternative way to structure business: the team-of-teams model. In this model, the leadership of the company creates smaller teams that manage themselves. And instead of presenting specific targets, the leadership gives each team a problem to solve. That can range from managing our customer service to making a new product.

“A top heavy and top-down micro-management ecosystem is just not what resonates today with knowledge work and thought work that an art form like software development is,” Bob says. “So the team of teams model presents a different concept. Instead of having this hierarchical command and control, the leadership strategy pivots to creating an environment where there’s a shared vision and a shared mission.”

-On the Dev Interrupted Podcast at 5:10

With more autonomy, teams are happier, more productive and work much more efficiently. But what do companies need to do to switch to this model?

Give autonomy through a shared vision

The first step is to make sure that the leadership team has a clear vision. What are you trying to achieve? This needs to be simple and summarize the ultimate aim of the company. Once you have that vision, everything else can begin to fall into place. You can allow teams to find their own way to an answer, which might be a solution you never would’ve dreamt of. Just make sure to give each team a set budget.

“Teams are granted a level of autonomy that then lets them define and discover their own purpose in where they fit in that vision,” Bob says. “Oftentimes it then provides invaluable feedback on how that vision needs to be altered based on what they’re seeing as opposed to that historical: I’m-just-being-told model.”

-On the Dev Interrupted Podcast at 5:47

This autonomy is key to the team-of-teams model. When you give creative and innovative people freedom to explore a problem, they’re much more likely to find a novel approach.

Give problems, not tasks

When you’ve brought together bright minds and talent, there’s no need to set specific tasks. You simply give the team a goal: a problem to solve. With small teams, they can easily organize themselves and make sure that they’re working productively. They might not solve it how you originally intended, but it’ll get solved.

“The Team of Teams model gives you that flexibility and I’m not telling you what to do, I’m giving you a problem to solve,” Bob says. “When it comes to execution in a dynamic landscape, Team of Teams is almost always better.”

Sure, in some situations like the medical world, there’s a definite correct answer. Things must happen in a set way. But Bob adds: 

“In the software world, I can’t think of a case where anyone knows the right answer … To say definitively: Build me exactly this in exactly this time and this will be your guaranteed result.”

-On the Dev Interrupted Podcast at 19:18

Keep only four levels of hierarchy

But if you’re only going to give people objectives, and not set tasks, you need to make sure that individual employees are never more than four steps away from the CEO. Too many layers in between the worker and the CEO causes problems. So if you start to get too many levels, it’s time to start breaking your teams down into smaller groups.

“There has to be that cohesion of vision and purpose, and as you add layers between the individual contributors on the team to that CEO’s vision, you start to dilute the messaging,” Bob says. “So when I say: ‘there’s a problem, go solve it.’ They have a frame of mind and you know what our organization is striving towards … It really prevents that communication breakdown.”

-On the Dev Interrupted Podcast at 15:39

Invest in your teams

Once you have your teams set up and can trust them to get on with a task, it’s time to start investing in them. Train them up. Help them grow as individuals and workers. Do that, and the whole team will improve.

“The foundational responsibility of leaders is to create an environment where your teams can thrive,” Bob says. “So I think continual learning is such an important dimension … If I don’t have the opportunity at work to find some level of mastery in a craft, I’m going to seek an opportunity where I can go get that.”

This is another reason why the old model doesn’t work. It makes people cogs in the machine, who don’t get those opportunities to master their craft and feel fulfilled.

“If you’re not, as a leader, investing in those teams to stay as sharp as possible, you’re doing a disservice to your teams. Eventually, your team skill sets are going to erode,” Bob says. “Carve out time for your folks to not only have access to content, but actually immerse in it.”

-On the Dev Interrupted Podcast at 20:50

Let teams self-police

When teams are set up correctly, and have a good mix of skills, they’ll choose their own leaders. Perhaps through a vote. They’ll also often decide among themselves whether someone needs more training or needs to leave the team for good.

“The team self-polices to some degree. So if something gets escalated, it’s only in the cases where the team hasn’t been able to self-adjudicate,” Bob explains on the Dev Interrupted Podcast at 8:44.

They’ll often elect their team leader, too. Which is good if someone wants to step back from that leadership role for a time or give someone else a chance to prove themselves. All these things are easier in the team-of-teams model. 

Stop looking for the perfect person

Another advantage of this model is that you don’t need to be looking for someone with all the skills. It’s often much easier to find an individual that slots neatly into a team, or five people that form a new team, than to find that one perfect person.

“Maybe it’s not the perfect person, but it’s a perfect fit on this team because of personalities and principles and values,” Bob says. “Even if they don’t become that perfect person that I was looking for, they’re still going to be a valuable contributor to that team.”

-On the Dev Interrupted Podcast at 32:31

It also makes it much easier to look for people who might need a little training, but you can always develop into a much stronger candidate. This opens up the pool of talent you have available to you.

Hear the full talk

This advice only scratches the surface of how organizations can make their business more efficient and productive. You can find out much more about the team-of-teams model and how it applies to business by listening to our podcast.

It’s important to remember that investment isn’t a completely altruistic act. While investors clearly want to encourage innovation, a primary motivation is to see a return on that investment. At the end of the day, they’re gambling that your idea will make them money.

This can make investing in true innovation tricky. True innovations are those rare game-changing technologies that revolutionize an industry. They’re notoriously difficult to spot. How often have you heard that people thought Apple would fail when they released the first iPhone or didn’t believe in Facebook when it first went public? True innovation rarely looks revolutionary to begin with. So how do investors spot which ideas are worth the effort?

We spoke with Jason Warner, managing director at Redpoint Ventures, to understand the reasoning behind investments and why investors are so picky.

1. Typical SaaS companies are easy to invest in, but true innovation doesn’t follow the same model

When developers start searching for investment, it can often be discouraging. While investors might not understand the intricacies of every technology company they invest in, they can at least spot the trends. They know and understand how a Software-as-a-service (SaaS) company grows.

If a company is growing, it has a very familiar pattern. And so investors can be quite confident that they’ll see a return. They’re much more willing to take a risk and ‘YOLO’ an investment.

“SaaS companies are really well understood in terms of how they grow,” explained Jason. “There is no real investor challenge to understand that if a company is growing 2x and its enterprise sales look good then … [investors] can just “yolo” invest into them. Because they understand what these companies look like … It’s all just Excel spreadsheets.”

-On the Dev Interrupted Podcast at 40:29

2. Investors often wait until the first round of funding, but developers need seed funding

If you’re developing a revolutionary piece of technology, then it’s likely that you need investment to get you off the ground. However, it’s difficult for investors to sort the good from the bad. How do they know you’ll be successful, without a few years of revenue behind you? It’s a catch 22 situation. You need the investment to get those first few years, but the investors need to see a few years before they’re willing to invest.

Look at how Netflix completely surprised the world. Nobody predicted that it would change how we watch video (most of all Blockbuster, who fatefully ignored the potential). This is a trend that harks back decades. Online shopping, personal computers, the television, even electric light bulbs were all disregarded when they were first conceived.

These industry-changing innovations need investment much earlier than typical SaaS companies. And spotting what works is more of an art than a science.

“[Investors] miss the fundamentals. They can see the ones that are the trends,” Jason said. “It should [then] become obvious in the next round or the round after that from other investors … oh yeah, that is a great company.”

-On the Dev Interrupted Podcast at 41:18

3. Developers need to seek out companies like Redpoint for seed investment

If you have a truly new idea, you’ll need to find an alternative to the usual investors. A company like Redpoint, which focuses on giving seed funding, is much more likely to take the time and actually investigate whether your technology will be a success.

It will take longer, of course. And it might not be the full amount you need to get your business started. But it’ll be what you need to begin building a proof of concept, get those first few years under your belt and start pitching to other investors.

“[If you’re] talking to a Redpoint investor, you should be flattered,” Jason explained. “What we’re thinking is that you are a majorly important company in the future. You have the potential to land … If Redpoint invests in you, we want it to basically mean that we think of you as a new primitive on the Internet or in whatever sector that you are in. And other people are going to build upon you.”

-On the Dev Interrupted Podcast at 41:35

Listen to the full conversation

If you’d like to learn more about what Jason thinks and how to secure yourself an investment, catch the podcast on our website.

Starved for top-level software engineering content? Need some good tips on how to manage your team? This article is inspired by Dev Interrupted - the go-to podcast for engineering leaders.

Dev Interrupted features expert guests from around the world to explore strategy and day-to-day topics ranging from dev team metrics to accelerating delivery. With new guests every week from Google to small startups, the Dev Interrupted Podcast is a fresh look at the world of software engineering and engineering management.

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