Successful software development depends on effective communication within and across teams. Structural properties of communication have long been recognized as important drivers of project performance. However, the empirical results are mixed in terms of which particular communication structures are effective in the context of geographically distributed projects. In this paper, we examined the role of hierarchy and small-world communication structures on iteration performance and quality in a large distributed commercial software project that used agile methods. We measured iteration performance by the number of work items that needed to be rescheduled to a later iteration. There was a strong positive effect for hierarchy but a marginal negative effect for small-worlds. We measured quality by the number of defects that resulted from the work done during an iteration. There was a negative effect for hierarchy but a very strong positive effect for small-worlds. The impact of communication structure remained strong and significant even after taking into consideration the effect of dependencies and other control factors. We discuss the implications of these results for research and practice.

17 pages

*IBM Research, Cambridge, MA

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