Typical of an organization with an agile mindset is the presence of self-managing teams that apply agile methods such as scrum. But how does that work when several independent teams work on the same product, service or end result? How do you foster efficient and effective collaboration between teams? And in the end, who has accountability?
At Spotify, they have found a way to integrate an agile way of working into the core of the organization. One of the company’s key success factors is the “Agile Engineering Culture”: by strategically deploying the autonomy of individuals, Spotify keeps its own employees engaged and is able to anticipate changes as the way of working evolves.
The approach, so far, might have paid off, as the company appears to do very well. Spotify has since its founding in 2006 grown to a service with 191 million monthly active users who have access to over 40 million songs. The company employs almost 3 000 employees and had a turnover of $ 4.6 billion in 2018.
Needless to say, the company and its way of working attract attention. The Spotify model now serves as an example for various multinationals – local examples on the Belgian market alone include ING bank and BNP Paribas Fortis. In a way, businesses employing the model are expected to adopt some of the behaviors of a tech company, putting increased attention towards the user experience and facilitating rapid innovation. And that might pay dividends, as technology disrupting traditional businesses is likely to increase the importance of both aspects. The intersection between a technology-driven organization model and how it is applies to traditional businesses is, without a doubt, an interesting one.
This article discusses the so-called Spotify Model with the aim to provide key insights into how the model operates, what components it contains and how other businesses can benefit from similar approach.
Extending the agile manifesto
The Spotify model, like most models describing scaled agile, consists of two parts: for one, a renewed organizational structure, which we’ll get to after this section, and second, a set of accompanying values that are to be driving this organizational change. The underlying values play a big role in adopting agile, and as many similar transformations have dictated in the past, values should be embodied by everyone applying the change first, as this will support most of a transformation’s successes later on.
In Spotify’s case, agile coached within the company wrote an extension to the agile manifesto. During the definition of the Spotify mode, the following organizational design principles were applied:
- “Continuous improvement: At Spotify, part of my work is to look for ways to continuously improve, both personally, and in the wider organisation.”
- “Iterative development: Spotify believes in short learning cycles, so that we can validate our assumptions as quickly as possible.”
- “Simplicity: Scaling what we do is key to Spotify’s success. Simplicity should be your guidance during scaling. This is as true for our technical solutions, as for our methods of working and organising the organisation.”
- “Trust: At Spotify we trust our people and teams to make informed decisions about the way they work and what they work on.”
- “Servant leadership: At Spotify managers are focused on coaching, mentorship, and solving impediments rather than telling people what to do.”
Source: Jurriaan Kamer, Medium, 2018
Structure of the Spotify Model
Now we’ve discussed the principles, let’s take a look at what the organizational model looks like. The Spotify model is made up of Squads, Tribes, Chapters and Guilds. The model’s strength is that, on one hand, employees with diverse expertise are grouped together in Squads to collaborate independently and, on the other hand, employees with the same expertise are enabled to share knowledge and experiences, in Chapters and Guilds, so that they can grow in their field of expertise.
Squads in the Spotify Model
Drawing a comparison to traditional agile ways of working, a Squad is similar to a Scrum team. This forms the base of the agile model. A Squad is self-steering, and usually contains less than 8 individuals. The Squad should feel like a mini-startup, with a multidisciplinary team that has all the knowledge and skills within to deliver a product or service from design to final delivery. Spotify assigns a long-term objective to each Squad within its ranks, and the squads are held responsible for developing and improving specific elements of the music service. For instance, one Squad might work on payment processing, whilst another might work on audio compression techniques – just to give some hypothetical examples.
Because the Squad is self-managing, there is no designated squad leader. Instead, each squad is assigned a Product Owner. The Product Owner is responsible for prioritizing the work on the team’s product backlog, but does not directly interfere with how the team works. The Product Owners of different Squads work together to develop a road map that, in turn, exhibits the strategic direction of the Spotify product.
Besides having a Product Owner, a Squad also has access to an agile coach that helps the team to identify and remove impediments, and facilitates continuous improvement to the team’s way of working. The agile coach also organizes various ceremonies, such as the sprint retrospective and sprint planning meetings.
Tribes in the Spotify Model
A Tribe is a group of Squads that work on the same (or related) products or services. For a hypothetical example, Squads working together on the audio streaming technology (such as networking and compression) can be combined in a Tribe, and squads working on the user experience (such as front-end design and branding) can be combined in a Tribe. A Tribe can be seen as a sort of incubator of a group of mini-startups with its own level of autonomy.
Each Tribe is led by a Tribe leader who is responsible for facilitating an optimal working environment for the various Squads. Usually, the Squads of a Tribe work from the same building, in an effort to facilitate collaboration between the various teams. In order to stay in touch with each other’s work, Tribe meetings are organized on a regular basis where all squads within a Tribe can demonstrate their work to each other.
A high level of social cohesion is important, as is reflected by the size of a tribe: tribes are often no larger than 100 individuals due to the fact that theoretically, we are unable to maintain more than 100 social relationships at any given time.
Chapters in the Spotify Model
Within the organization, all employees with the same expertise are spread over different multidisciplinary Squads. The squad responsible for the Spotify login process might have a front-end designer, but a squad working on the iOS interface might have a front-end designer in place well. Though their expertise is similar, it’s distributed among the various squads to ensure squad-level autonomy. But to improve and grow in this expertise, experts on a topic must be brought together – this is where Chapters and Guilds come in. Both act as cross-company structures in which employees can share experiences and grow together around a given topic or skill set.
Guilds in the Spotify Model
A Guild is similar to a Chapter, in that it is a group of employees with the same expertise or interests, but instead of being limited to a single Tribe it is spread over the entire organization.Once in a while, the Guild Coordinator organizes meetings where all employees with the same expertise come together to share knowledge and experiences and to improve and shape the organization as a whole.
On the company-level two specialist roles exist as well: when several teams work on the same sub-product, someone might be made accountable for this sub-product. The so-called System Owner is responsible for the operation of a certain subsystem, for instance, the Android app or Windows client. Overseeing the entire Spotify architecture is another specialist, the Chief Architect, who tracks all developments and ensures the entire architecture is in line with the company vision.
We hope this short introduction to the Spotify model has provided you with a better idea of what the Spotify model entails, and how it can bring values to other organizations as well. As scaling agile is gaining traction, companies have increasingly started adopting scaled agile practices through a variety of frameworks or derivatives thereof. Our clients, specifically, appear to either lean towards the Scaled Agile Framework (SAFe) or the Spotify model, each tailored to their unique company flavor. Regardless, each model has its own origins and strengths. To discuss what model could be a good fit for your organization and how scaled agile can cater to your ambitions, please contact us and one of our agile transformation experts will gladly guide you along the various options available.
- Agile à la Spotify – Joakim Sundén, Spotifylabs.com, 2013
- How to Build your own Spotify Model – Jurriaan Kamer, Medium.com, 2018
- Spotify engineering culture, part 1 – Henrik Kniberg, Spotifylabs.com, 2014
- Spotify engineering culture, part 2 – Henrik Kniberg, Spotifylabs.com, 2014
- Scaling Agile @ Spotify, Henrik Kniberg and Anders Ivarsson, Scrisp.se, 2012