“The Phoenix Project” was published in 2013 and was co-authored by three experts in the field of DevOps and IT management: Gene Kim, Kevin Behr, and George Spafford. The book was inspired by the authors’ desire to convey the principles and practices of DevOps—a movement that seeks to bridge the gap between development (Dev) and operations (Ops) teams in IT organizations.
“The Phoenix Project” is presented as a novel, following the journey of Bill Palmer, an IT manager who is thrust into a leadership role at the struggling Parts Unlimited company. Under immense pressure to deliver a critical software project, Bill embarks on a transformative journey guided by a mysterious and wise mentor, Erik, who introduces him to the principles of DevOps and Lean manufacturing.
Key Concepts and Takeaways
“The Phoenix Project” introduces several key concepts and takeaways that have had a profound impact on the world of IT and business:
1. The Three Ways
The book presents the “Three Ways” as a framework for understanding the core principles of DevOps:
The First Way: Flow emphasizes the smooth flow of work from development to operations, reducing bottlenecks and delays.
The Second Way: Feedback focuses on obtaining fast and valuable feedback at every stage of the development process to facilitate continuous improvement.
The Third Way: Continual Learning and Experimentation encourages a culture of learning from both successes and failures to drive innovation and adaptation.
2. The Four Types of Work
“The Phoenix Project” categorizes work into four types:
Business Projects: Initiatives that bring new value to the organization.
Internal IT Projects: Efforts aimed at improving internal IT processes.
Operational Change: Activities that address existing technical debt and operational issues.
Unplanned Work: Unforeseen issues and emergencies that disrupt planned work.
Understanding and managing these work types is critical to achieving a balanced and efficient workflow.
3. The Theory of Constraints
The book introduces the Theory of Constraints (TOC) as a fundamental concept. It emphasizes identifying and addressing the bottleneck in a process to enhance overall flow and efficiency. TOC plays a central role in Bill’s journey to transform Parts Unlimited.
4. DevOps and Agile Practices
“The Phoenix Project” highlights the importance of DevOps practices such as automated testing, continuous integration, and continuous delivery (CI/CD). These practices enable faster, more reliable software delivery. Additionally, it underscores the synergy between DevOps and Agile methodologies, emphasizing their compatibility and shared objectives.
5. Transformational Leadership
The book underscores the significance of transformational leadership, where leaders inspire and empower their teams to embrace change and innovation. Bill’s transformation as a leader and mentor to his team is a central theme throughout the story.
The Impact of “The Phoenix Project”
“The Phoenix Project” has had a profound impact on IT and business communities:
1. DevOps Movement
The book played a pivotal role in popularizing DevOps practices and principles. It provided a practical and relatable narrative that resonated with IT professionals seeking to improve their organizations’ efficiency and collaboration.
2. Cultural Shift
“The Phoenix Project” highlighted the cultural aspects of DevOps and the importance of creating a collaborative and learning-focused environment. It encouraged organizations to prioritize culture alongside tools and processes.
3. Improved Business Outcomes
Organizations that have embraced the principles outlined in the book have reported improved delivery speed, reduced downtime, and increased customer satisfaction. These outcomes align with the central message of the book: that DevOps practices lead to better business results.
4. Further Works
Gene Kim, one of the co-authors of “The Phoenix Project,” went on to co-author more books, including “The DevOps Handbook” and “Accelerate,” which expanded on the concepts introduced in the original book.
Challenges and Criticisms
While “The Phoenix Project” has received widespread acclaim, it is not without its criticisms:
1. Simplification
Critics argue that the book simplifies the complexities of real-world IT environments, making it appear easier to implement DevOps practices than it actually is in practice.
2. Limited Industry Scope
The book’s examples and case studies primarily focus on IT and software development, which may not fully address the challenges faced by organizations in other industries.
3. Fictional Format
Some readers find the novel format distracting and would have preferred a more straightforward, non-fictional presentation of the concepts.
Conclusion
“The Phoenix Project” has played a pivotal role in reshaping how organizations approach IT management, development, and operations. Its compelling storyline, relatable characters, and practical insights have made it a cornerstone in the world of DevOps and Agile practices. As technology continues to evolve, the principles introduced in the book remain relevant, guiding organizations toward greater efficiency, collaboration, and value delivery. Whether you’re an IT professional, a business leader, or simply curious about DevOps, “The Phoenix Project” offers valuable lessons on transformation, leadership, and the power of cross-functional collaboration.
Key Highlights
The Three Ways:
Flow: Emphasizes the smooth flow of work from development to operations, reducing bottlenecks and delays.
Feedback: Focuses on obtaining fast and valuable feedback at every stage of the development process to facilitate continuous improvement.
Continual Learning and Experimentation: Encourages a culture of learning from both successes and failures to drive innovation and adaptation.
The Four Types of Work:
Business Projects: Initiatives that bring new value to the organization.
Internal IT Projects: Efforts aimed at improving internal IT processes.
Operational Change: Activities that address existing technical debt and operational issues.
Unplanned Work: Unforeseen issues and emergencies that disrupt planned work. Understanding and managing these work types is critical to achieving a balanced and efficient workflow.
Theory of Constraints (TOC):
Emphasizes identifying and addressing the bottleneck in a process to enhance overall flow and efficiency. Plays a central role in Bill’s journey to transform Parts Unlimited.
DevOps and Agile Practices:
Includes automated testing, continuous integration, and continuous delivery (CI/CD).
Enables faster, more reliable software delivery.
Underscores the synergy between DevOps and Agile methodologies, emphasizing their compatibility and shared objectives.
Transformational Leadership:
Underscores the significance of transformational leadership.
Leaders inspire and empower their teams to embrace change and innovation.
Bill’s transformation as a leader and mentor to his team is a central theme throughout the story.
Impact:
DevOps Movement: Popularized DevOps practices and principles.
Cultural Shift: Highlighted the importance of creating collaborative and learning-focused environments.
Improved Business Outcomes: Faster delivery, reduced downtime, increased customer satisfaction.
Further Works: Led to more books by co-author Gene Kim, expanding on DevOps concepts.
Challenges and Criticisms:
Simplification: Critics argue oversimplification of real-world IT environments.
Limited Industry Scope: Primarily focused on IT and software development.
Fictional Format: Some readers find the novel format distracting.
Related Framework
Description
When to Apply
DevOps Principles
The set of principles and practices that promote collaboration, communication, and integration between software development (Dev) and IT operations (Ops) teams to improve the speed and quality of software delivery.
IT management, project management, organizational change initiatives
A framework for IT service management that provides best practices for aligning IT services with the needs of the business, including processes for service design, transition, and operation.
IT service management, organizational alignment, process optimization
Agile Methodology
An iterative approach to software development that emphasizes flexibility, collaboration, and customer feedback to deliver value quickly and adapt to changing requirements.
A management philosophy focused on eliminating waste, optimizing processes, and delivering value to customers efficiently. It emphasizes continuous improvement and respect for people.
Operations management, process optimization, quality improvement
Kanban
A visual management method used to track and optimize workflows, particularly in software development and IT operations. It helps teams visualize work, limit work in progress, and improve efficiency.
A software development practice where code changes are frequently integrated into a shared repository, verified by automated tests, and validated to detect integration errors early in the development process.
Software development, version control, quality assurance
Continuous Delivery (CD)
An extension of continuous integration where software changes are automatically built, tested, and deployed to production environments, enabling faster and more reliable software releases.
A discipline that applies software engineering principles to operations tasks, emphasizing automation, reliability, and scalability in managing large-scale systems.
IT operations, system reliability, incident management
In a functional organizational structure, groups and teams are organized based on function. Therefore, this organization follows a top-down structure, where most decision flows from top management to bottom. Thus, the bottom of the organization mostly follows the strategy detailed by the top of the organization.
In a flat organizational structure, there is little to no middle management between employees and executives. Therefore it reduces the space between employees and executives to enable an effective communication flow within the organization, thus being faster and leaner.
Project portfolio management (PPM) is a systematic approach to selecting and managing a collection of projects aligned with organizational objectives. That is a business process of managing multiple projects which can be identified, prioritized, and managed within the organization. PPM helps organizations optimize their investments by allocating resources efficiently across all initiatives.
Harvard Business School professor Dr. John Kotter has been a thought-leader on organizational change, and he developed Kotter’s 8-step change model, which helps business managers deal with organizational change. Kotter created the 8-step model to drive organizational transformation.
The Nadler-Tushman Congruence Model was created by David Nadler and Michael Tushman at Columbia University. The Nadler-Tushman Congruence Model is a diagnostic tool that identifies problem areas within a company. In the context of business, congruence occurs when the goals of different people or interest groups coincide.
McKinsey’s Seven Degrees of Freedom for Growth is a strategy tool. Developed by partners at McKinsey and Company, the tool helps businesses understand which opportunities will contribute to expansion, and therefore it helps to prioritize those initiatives.
Mintzberg’s 5Ps of Strategy is a strategy development model that examines five different perspectives (plan, ploy, pattern, position, perspective) to develop a successful business strategy. A sixth perspective has been developed over the years, called Practice, which was created to help businesses execute their strategies.
The COSO framework is a means of designing, implementing, and evaluating control within an organization. The COSO framework’s five components are control environment, risk assessment, control activities, information and communication, and monitoring activities. As a fraud risk management tool, businesses can design, implement, and evaluate internal control procedures.
The TOWS Matrix is an acronym for Threats, Opportunities, Weaknesses, and Strengths. The matrix is a variation on the SWOT Analysis, and it seeks to address criticisms of the SWOT Analysis regarding its inability to show relationships between the various categories.
Lewin’s change management model helps businesses manage the uncertainty and resistance associated with change. Kurt Lewin, one of the first academics to focus his research on group dynamics, developed a three-stage model. He proposed that the behavior of individuals happened as a function of group behavior.
OpenAI is an artificial intelligence research laboratory that transitioned into a for-profit organization in 2019. The corporate structure is organized around two entities: OpenAI, Inc., which is a single-member Delaware LLC controlled by OpenAI non-profit, And OpenAI LP, which is a capped, for-profit organization. The OpenAI LP is governed by the board of OpenAI, Inc (the foundation), which acts as a General Partner. At the same time, Limited Partners comprise employees of the LP, some of the board members, and other investors like Reid Hoffman’s charitable foundation, Khosla Ventures, and Microsoft, the leading investor in the LP.
Airbnb follows a holacracy model, or a sort of flat organizational structure, where teams are organized for projects, to move quickly and iterate fast, thus keeping a lean and flexible approach. Airbnb also moved to a hybrid model where employees can work from anywhere and meet on a quarterly basis to plan ahead, and connect to each other.
The Amazon organizational structure is predominantly hierarchical with elements of function-based structure and geographic divisions. While Amazon started as a lean, flat organization in its early years, it transitioned into a hierarchical organization with its jobs and functions clearly defined as it scaled.
The Coca-Cola Company has a somewhat complex matrix organizational structure with geographic divisions, product divisions, business-type units, and functional groups.
Costco has a matrix organizational structure, which can simply be defined as any structure that combines two or more different types. In this case, a predominant functional structure exists with a more secondary divisional structure.
Costco’s geographic divisions reflect its strong presence in the United States combined with its expanding global presence. There are six divisions in the country alone to reflect its standing as the source of most company revenue.
Compared to competitor Walmart, for example, Costco takes more a decentralized approach to management, decision-making, and autonomy. This allows the company’s stores and divisions to more flexibly respond to local market conditions.
Dell has a functional organizational structure with some degree of decentralization. This means functional departments share information, contribute ideas to the success of the organization and have some degree of decision-making power.
eBay was until recently a multi-divisional (M-form) organization with semi-autonomous units grouped according to the services they provided. Today, eBay has a single division called Marketplace, which includes eBay and its international iterations.
Facebook is characterized by a multi-faceted matrix organizational structure. The company utilizes a flat organizational structure in combination with corporate function-based teams and product-based or geographic divisions. The flat organization structure is organized around the leadership of Mark Zuckerberg, and the key executives around him. On the other hand, the function-based teams are based on the main corporate functions (like HR, product management, investor relations, and so on).
Goldman Sachs has a hierarchical structure with a clear chain of command and defined career advancement process. The structure is also underpinned by business-type divisions and function-based groups.
Google (Alphabet) has a cross-functional (team-based) organizational structure known as a matrix structure with some degree of flatness. Over the years, as the company scaled and it became a tech giant, its organizational structure is morphing more into a centralized organization.
IBM has an organizational structure characterized by product-based divisions, enabling its strategy to develop innovative and competitive products in multiple markets. IBM is also characterized by function-based segments that support product development and innovation for each product-based division, which include Global Markets, Integrated Supply Chain, Research, Development, and Intellectual Property.
McDonald’s has a divisional organizational structure where each division – based on geographical location – is assigned operational responsibilities and strategic objectives. The main geographical divisions are the US, internationally operated markets, and international developmental licensed markets. And on the other hand, the hierarchical leadership structure is organized around regional and functional divisions.
McKinsey & Company has a decentralized organizational structure with mostly self-managing offices, committees, and employees. There are also functional groups and geographic divisions with proprietary names.
Microsoft has a product-type divisional organizational structure based on functions and engineering groups. As the company scaled over time it also became more hierarchical, however still keeping its hybrid approach between functions, engineering groups, and management.
Nestlé has a geographical divisional structure with operations segmented into five key regions. For many years, Swiss multinational food and drink company Nestlé had a complex and decentralized matrix organizational structure where its numerous brands and subsidiaries were free to operate autonomously.
Nike has a matrix organizational structure incorporating geographic divisions. Nike’s matrix structure is also present at the regional and sub-regional levels. Managerial responsibility is segmented according to business unit (apparel, footwear, and equipment) and function (human resources, finance, marketing, sales, and operations).
Patagonia has a particular organizational structure, where its founder, Chouinard, disposed of the company’s ownership in the hands of two non-profits. The Patagonia Purpose Trust, holding 100% of the voting stocks, is in charge of defining the company’s strategic direction. And the Holdfast Collective, a non-profit, holds 100% of non-voting stocks, aiming to re-invest the brand’s dividends into environmental causes.
Samsung has a product-type divisional organizational structure where products determine how resources and business operations are categorized. The main resources around which Samsung’s corporate structure is organized are consumer electronics, IT, and device solutions. In addition, Samsung leadership functions are organized around a few career levels grades, based on experience (assistant, professional, senior professional, and principal professional).
Sony has a matrix organizational structure primarily based on function-based groups and product/business divisions. The structure also incorporates geographical divisions. In 2021, Sony announced the overhauling of its organizational structure, changing its name from Sony Corporation to Sony Group Corporation to better identify itself as the headquarters of the Sony group of companies skewing the company toward product divisions.
Starbucks follows a matrix organizational structure with a combination of vertical and horizontal structures. It is characterized by multiple, overlapping chains of command and divisions.
Tesla is characterized by a functional organizational structure with aspects of a hierarchical structure. Tesla does employ functional centers that cover all business activities, including finance, sales, marketing, technology, engineering, design, and the offices of the CEO and chairperson. Tesla’s headquarters in Austin, Texas, decide the strategic direction of the company, with international operations given little autonomy.
Toyota has a divisional organizational structure where business operations are centered around the market, product, and geographic groups. Therefore, Toyota organizes its corporate structure around global hierarchies (most strategic decisions come from Japan’s headquarter), product-based divisions (where the organization is broken down, based on each product line), and geographical divisions (according to the geographical areas under management).
Walmart has a hybrid hierarchical-functional organizational structure, otherwise referred to as a matrix structure that combines multiple approaches. On the one hand, Walmart follows a hierarchical structure, where the current CEO Doug McMillon is the only employee without a direct superior, and directives are sent from top-level management. On the other hand, the function-based structure of Walmart is used to categorize employees according to their particular skills and experience.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
